China data, Fed comments lift futures

Chinese factory output growth surged to a 19-month high in October, signaling that it has firmly put the worst of the global economic crisis behind it. For details, see

Top Fed officials said in a string of speeches on Tuesday that high unemployment and reluctant consumers would likely make a U.S. economic recovery weak and erratic.

The news out of China has raised the upbeat mood on global economic recovery, and comments from the Fed members are making continuous opportunities for investors to take risks, said Peter Cardillo, chief market economist at Avalon Partners in New York.

S&P 500 futures gained 8.1 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 rose 68 points, and Nasdaq 100 futures were up 15.50 points.

Japan's core machinery orders, a highly volatile series regarded as an indicator of capital spending, also jumped 10.5 percent in September, marking the second straight month of gains.

U.S. Treasury Secretary Timothy Geithner said on Wednesday he deeply believes the United States needs to maintain a strong dollar and said the United States was determined to reduce its budget deficit. But the dollar extended its recent decline to a 15-month low against major currencies in early trading.

Macy's Inc shares tumbled 2.1 percent to $19.01 in premarket trading after the company reported third-quarter results that were stronger-than-expected but gave a gloomy outlook on same store sales for the fourth quarter.

Computer Sciences Corp , The Progressive Corp and Applied Materials Inc are also due to report results.

Unhappy over constraints imposed by U.S. government overseers, American International Group Inc's chief executive, Robert Benmosche, told the company's board last week that he was considering stepping down, the Wall Street Journal said, citing people familiar with the matter. AIG shares fell 2.1 percent to $36.80 in premarket trading.

Toll Brothers Inc gained 10 percent to $20.24 before the bell following the homebuilder's release of preliminary results on Tuesday.

United Parcel Service Inc , the world's largest package delivery service, expects growth in its volumes next year as the global economy gradually recovers, its chief said on Wednesday.

Wednesday's session was expected to be quiet because of the Veterans Day holiday. The U.S. bond market and government offices will remain closed, while other markets will trade normally.

(Editing by Padraic Cassidy)