Stock futures indicate rebound from recent sell-off

NEW YORK (Reuters) - Stock index futures advanced on Tuesday retracing ground lost the prior day, indicating that Wall Street would rebound off its worst daily session since November.

Major averages dropped about 1 percent on Monday, pressured by renewed worries over the euro zone's sovereign debt crisis. While the day's decline pushed the S&P 500 into negative territory for February, equities have been strong performers of late, and the benchmark index is up 4.9 percent for 2013.

Wall Street has advanced on strong fourth-quarter earnings and signs of improved economic growth, suggesting the market's longer-term trend remains higher.

"Markets may have been slightly ahead of themselves, but investors recognize that earnings and data are both more positive than we previously thought, so no one should worry that yesterday was the start of anything bigger," said Oliver Purshe, president of Gary Goldberg Financial Services in Suffern, New York.

Archer Daniels Midland , Walt Disney Co and Kellogg Co are among the companies on tap to report on Tuesday. According to Thomson Reuters data, of the 256 S&P 500 companies that have reported earnings thus far, 68.4 percent have beaten profit expectations, compared with the 62 percent average since 1994 and the 65 percent average over the past four quarters.

Fourth-quarter earnings for S&P 500 companies are expected to rise 4.4 percent, according to the data. That estimate is above the 1.9 percent forecast at the start of earnings season, but well below the 9.9 percent forecast on October 1.

S&P 500 futures rose 7.2 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 69 points and Nasdaq 100 futures rose 11.5 points.

At current levels, the S&P is about 5.4 percent away from its all-time intraday high of 1,576.09, reached in October 2011.

Investors will also be looking to the Institute for Supply Management's January non-manufacturing index, due at 10 a.m. Economists forecast a reading of 55.2, versus 55.7 in December.

Last week, the ISM's manufacturing index for January showed the pace of growth in manufacturing picked up to its highest level in nine months.

In company news, McGraw-Hill will be in focus a day after news the U.S. Justice Department plans to sue the company's Standard & Poor's unit over its mortgage bond ratings. The action would mark the first such federal action against a credit rating agency related to the recent financial crisis.

The stock plummeted almost 14 percent in Monday's session, its worst daily losses since the October 1987 market crash.

U.S. shares of BP Plc rose 1.9 percent to $44.49 before the bell after the company reported earnings that beat expectations and said underlying financial momentum would be "strongly evident" by 2014.

Dell Inc may also be volatile as the company moved closer to a nearly $24 billion buyout deal to take the company private. The stock rose 1.1 percent to $13.42 in light premarket trading.

U.S. stocks slid on Monday as worries about Europe caused the market to pull back from recent gains.

(Editing by Theodore d'Afflisio)

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