Futures point to higher open, S&P 500's record in view

By Ryan Vlastelica

NEW YORK (Reuters) - U.S. stock index futures pointed to a higher open on Tuesday, suggesting a rebound from the previous session and again putting the S&P 500 within striking distance of its all-time intraday high.

The benchmark index last week set an all-time closing high, but has thus far been unable to reach its intraday record of 1,576.09, an important psychological level for investors.

While moves may be limited this week ahead of the U.S. monthly payrolls report on Friday, investors will be looking to the latest economic data for signs of economic strength.

February factory orders are scheduled for release at 10 a.m. (1400 GMT) and are seen rising 2.9 percent, compared with a 2 percent drop in the previous month.

 

The Institute for Supply Management-New York's March index of regional business activity is due at 9:45 a.m. U.S. car companies will report March sales on Tuesday, and a Reuters poll forecast total vehicle sales at 15.32 million last month.

"We've had significant pockets of strength in the data, but also some weakness. If we can see some broad-based expansion of growth, that would be very beneficial for markets," said Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, New York.

S&P 500 futures rose 6.3 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 48 points and Nasdaq 100 futures rose 19.25 points.

A weak reading on U.S. manufacturing sparked a decline in Monday's session, though other indicators have pointed to a strengthening U.S. economy and helped push both the Dow and S&P to record highs last week.

Telecommunication shares will be in focus. Verizon Communications and AT&T have been working together on a breakup bid for British mobile operator Vodafone , according to the Financial Times' Alphaville blog.

Verizon and AT&T, both Dow components, were not active in premarket trading, but U.S. shares of Vodafone gained 4.7 percent to $29.67 before the bell. The stock was one of the biggest boosts among European shares <.FTEU3>, which rose 1 percent.

European shares bounced back after a two-week slide and with a blue chip index breaking above a resistance level, as the M&A activity helped lift sentiment.

Healthcare stocks will also be in focus as planned cuts in U.S. government payments for private Medicare Advantage insurers did not materialize. Humana , which derives about two-thirds of its revenue from Medicare Advantage business, soared 9.6 percent to $82.20 in premarket trading.

The S&P is up 9.5 percent so far this year while the Dow is up more than 11 percent. While investors view market momentum as positive, many are also calling for a pullback given the size and swiftness of recent gains.

"We take money off the table on days when we see rallies of about 1 percent," said Pursche. "We think things are getting overstretched."

Hewlett-Packard Co slumped 4.1 percent to $22.36 in premarket trading after Goldman Sachs downgraded the Dow component, saying it expects the company's earnings power to come under pressure. Goldman has a $16 price target on the stock, which implies downside of more than 30 percent from HP's Monday closing price.

Goldman Sachs also removed Apple Inc from its Conviction Buy list, though it affirmed its "buy" rating on the stock. "We believe Apple may find it difficult to hit consensus expectations in the March and June quarters," the bank wrote to clients.

BGC Partners late Monday said it would sell its eSpeed platform to Nasdaq OMX Group for $750 million in cash. Shares of BGC soared 40 percent to $5.40 before the bell.

(Editing by W Simon and Kenneth Barry)