Stock index futures pared gains on Tuesday after a government report showed new housing starts and permits unexpectedly fell in July.

But futures were still pointing to a higher open on Wall Street after shares of retailers Home Depot Inc and Target Corp rose in premarket trading following upbeat quarterly results.

S&P 500 futures rose 3.5 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 33 points, and Nasdaq 100 futures added 8.75 points.

(Editing by Padraic Cassidy)