Stock index futures pointed to a strong open for Wall Street on Tuesday, adding to gains from the previous session, as expectations grew that a solution would be found for Greece to avoid a default.
Euro zone finance ministers said the Greek government had until July 3 to approve new steps in order to get the next installment of 110 billion euros in EU and International Monetary Fund aid agreed in May 2010.
The market expected a vote of confidence in Greek Prime Minister George Papandreou new cabinet to pass on Tuesday, with the vote needed in order to secure backing for a new round of spending cuts, tax hikes and state asset sales needed in return for the EU and IMF funds.
The Federal Reserve Open Market Committee begins a two-day meeting on Tuesday. The Fed is expected to cut its growth forecast for 2011, but the central bank and its chairman, Ben Bernanke, will likely continue to argue the slowdown is temporary with a pickup due in the second half of the year.
Economic data scheduled for release include U.S. home sales for May, with a drop to around 4.8 million likely to be seen, compared with 5.05 million the month before.
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U.S. lawmakers working to rein in the country's rising debt said they will have to make substantial progress this week to ensure the country retains its top-notch credit rating.
Ratings agency Fitch said on Tuesday it would place the U.S. credit rating on watch negative if its debt ceiling is not raised by August 2, when the U.S. Treasury has warned that it may not be able to borrow more.
In Europe, the pan-European FTSEurofirst 300 <.FTEU3> index of top shares rose in early trade, bouncing back from falls on Monday as banks reversed the previous session's losses on optimism that Greece will receive funds in time for its July debt payment.
(Reporting by Harpreet Bhal. Editing by Jane Merriman)