Stocks were set to open flat to slightly higher on Tuesday, with sentiment underpinned by data showing a surprise jump in U.S. housing starts and by hopes that banks may be seeing some stabilization.

Bank stocks rising before the bell included JPMorgan , up 2.2 percent at $23.59. Citigroup climbed 2.1 percent to $2.38. Recent comments from top executives of some major U.S. banks, including Citigroup, that they are off to a strong start in 2009 have buoyed optimism about the banking sector.

Shares of home improvement retailer Home Depot , a Dow component, climbed 3 percent to $20.74 before the bell after a brokerage recommended the stock as a buy.

We have seen a very sharp acceleration in housing starts, but that might not be part of a trend. It could just be part of our having seen such a large decline earlier, said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut.

U.S. housing starts for February unexpectedly rebounded, surging 22.2 percent, according to a government report.

We're more or less seeing a little rise in the futures, and I would say that generally, investors may look at the housing data as a little bit of a positive, Goldman said.

S&P 500 futures inched up 0.70 points and were above fair value, a formula to evaluate pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 7 points, and Nasdaq 100 futures edged up 2.50 points.

But bellwether Alcoa Inc's decision to cut its spending and dividend fueled caution. The company's announcement late on Monday provided one more clear sign of the widening impact of the economic slump.

Alcoa shares were off 10.9 percent to $5.45 before the bell. Any sign of more deterioration in the economy will present a significant hurdle for a market trying to sustain a rebound from 12-year lows reached earlier this month.

Tuesday also marks the start of the Federal Reserve's 2-day policy-setting meeting.

With the U.S. central bank having cut interest rates close to zero, investors' focus will be on whether it would buy long-dated government debt as an additional measure to revive the economy.

(Additional reporting by Ryan Vlastelica; Editing by Chizu Nomiyama)