Stock index futures rose on Tuesday, with sentiment improving on signs of progress in dealing with Europe's long-running sovereign debt crisis.

Hopes built that Greece was nearing a debt swap deal, just a day after talks stalled, lessening the odds of a messy default and possibly creating other shocks to the region's financial system.

Also boosting the market, European Union leaders agreed on a stricter budget discipline plan to prevent further debt build-up in the region.

Since December, Wall Street has decoupled from European equities, trading less in tandem with the region than in the months before. Markets are still being driven by developments in the region.

Investors have been biased towards buying, and now that we have some positive news they're using it as an excuse to jump in, said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania. These plans may simply kick the issue down the road, but it does address things in terms of how the region is being perceived.

Bank stocks, which have been pressured by setbacks in Europe, rallied in modest premarket trading. U.S-listed shares of Barclays Plc rose 1 percent to $13.55 while Bank of America Corp was up 1.1 percent to $7.15 in premarket trade.

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares rose nearly 1 percent, putting European equities on track for their best month since October. <.EU>

S&P 500 futures rose 5.8 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 53 points, and Nasdaq 100 futures gained 9.75 points.

The S&P is up 4.4 percent in January, heading into the last trading day of the month, and having its best month since October. The Dow is up 3.6 percent and has had three straight months of gains. The Nasdaq is up almost 8 percent on strong results from technology companies.

Quarterly profits from drugmakers Pfizer Inc
and Eli Lilly & Co both topped expectations. But Pfizer trimmed its 2012 outlook, and Lilly repeated an outlook calling for a drop in 2012 earnings. Pfizer dipped 0.6 percent to $21.44 premarket and Lilly was up 3.1 percent $40.45.

RadioShack Corp slid 26 percent to $7.55 before the bell a day after warning of a drop in fourth-quarter profit.

A number of other major companies reported results, including Exxon Mobil Corp , U.S. Steel Corp and United Parcel Service Inc . Exxon shares lost 1 percent to $84.60, while U.S. Steel gained 1.9 percent to $29.27 and UPS rose 1.1 percent to $77, all premarket.

On the economic data front, the S&P/Case-Shiller home price index for November will be released at 9 a.m. EST (1400 GMT) and is seen improving slightly from the previous month.

Consumer confidence for January is seen rising to 68 from 64.5 in December, while the Chicago Purchasing Manager's Index, also for January, is seen rising to 63 from 62.2 in the previous month. Consumer confidence is due at 10 a.m. EST (1500 GMT), while Chicago PMI is expected at 9:45 a.m. EST (1445 GMT).

U.S. stocks fell for much of Monday's session, but an afternoon rally cut losses in a sign of the underlying resilience the market has shown early in the year. The S&P held above the psychologically important 1,300 level after crossing it for the first time in six months earlier in January.

(Reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)