Stocks were set to jump at the open on Tuesday after a bullish Alcoa forecast boosted the outlook for the commodities sector and pointed to a stronger global economy.
Copper prices rose 2.8 percent, the best performance since late November, as markets bet on stronger economies and more demand.
That's the assumption the marketplace is making this morning, for sure, said Art Hogan, managing director of Lazard Capital Markets in New York. This is one day, though. It's not as if we've cured all our problems.
S&P futures traded above 1,285, a level that has been hard for the cash market to breach. It was the closing high in late October and has been the highest since August, giving the index a strong technical resistance.
S&P 500 futures rose 13.4 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures gained 115 points, and Nasdaq 100 futures added 23.25 points.
An exchange-traded fund of basic materials stocks
Mining stocks led European markets higher. The STOXX Europe 600 Basic Resources index <.SXPP> rose 3.2 percent and the broad FTSEurofirst 300 <.FTEU3> gained 1.8 percent.
Still, caution prevailed ahead of debt auctions in Spain and Italy later in the week that will test market appetite in two countries at the forefront of the euro zone debt crisis.
My guess is we will probably get more good news than bad over the course of the week on those auctions, Lazard's Hogan said.
Fitch Ratings said it does not expect to cut France's AAA credit rating this year, while countries under review such as Italy or Spain could be downgraded by one or two notches.
U.S. bank stocks were expected to continue a rebound that has lifted the KBW bank index 6.9 percent so far this year. The Select Sector Financial SPDR ETF
The U.S. Securities and Exchange Commission has urged banks to publish more details about exposure to European sovereign debt, a factor in the recent bankruptcy of the futures brokerage MF Global Holdings Ltd
Liz Claiborne Inc
U.S. stocks ended slightly higher on Monday in a light-volume session as investors stayed cautious ahead of corporate earnings and key auctions for European debt this week.
(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)