Stocks headed for a sharp rebound at the open on Wednesday after a sell-off the previous session left indexes at 12-year lows, with a jump in the price of oil and other commodities spurring energy and natural resource stocks.

Investor optimism was also buoyed by news out of China suggesting the world's third-largest economy may be on the brink of a recovery, while a rebound in Asian and European stocks added to the positive tone.

Oil prices rose 5 percent lifting shares of Exxon Mobil rose 1.3 percent to $65.20 before the bell, while Alcoa Inc rose 4 percent to $5.80, and miner Freeport-McMoRan Copper & Gold Inc 7.3 percent to $30.47.

China will increase spending in areas such as infrastructure and manufacturing on top of the 4 trillion yuan ($585 billion) stimulus package that it unveiled in November, a senior economic planning official said.

What is good for China is good for the world, said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

But fresh signs of labor market weakness were likely to make some investors cautious, a day after the S&P 500 <.SPX> closed below 700 for the first time since October 1996.

U.S. private sector job losses accelerated in February, according to a report by ADP Employer Services that came in worse than economists' expectations. ADP said private employers cut 697,000 jobs versus a revised 614,000 in January, for the biggest loss since the report's 2001 launch.

S&P 500 futures rose 16.90 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 gained 141 points, and Nasdaq 100 futures rose 17.25 points.

U.S. front month crude nearly 5 percent to $43.60 a barrel, supported by news that Chinese manufacturing improved in February.

U.S. Treasury Secretary Timothy Geithner is back on Capitol Hill to testify before the U.S. Senate Finance Committee on the president's budget proposal at 10 a.m. (1500 GMT), while the Institute for Supply Management releases its February nonmanufacturing index, also expected to show deterioration in economic activity, at 10.00 a.m..

The Fed releases its Beige Book of regional economic conditions at 2 p.m..

(Editing by James Dalgleish)