Wall Street was set for a slightly higher open on Friday following encouraging data out of China and as a two-year high in the S&P 500 had investors betting on a year-end rally.

A slew of data showed China's imports and exports jumped in November, bank lending topped forecasts and property investment powered ahead. As well, China increased the reserve requirement for banks but kept interest rates on hold.

The move was a milder form of monetary tightening after expectations that China could raise rates to rein in its red-hot economy, though a rate hike was still possible.

They seem to be more interested in lifting bank reserves than raising rates at this point, and that's the lesser of the two evils. So that should be positive for world markets, said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

Stocks closed slightly higher on Thursday, with the S&P 500 ending at a two-year high, a trend investors expect to continue through the rest of the year. The Nasdaq closed at its highest level since December 2007.

Analysts said the recent surge in financial stocks added to optimism the market will mount another leg up. After lagging the rally in September and October, the S&P financial index <.GSPF> has jumped 8.1 percent since the beginning of the month.

As well, the S&P closed above 1,228, a resistance level that represents the 61.8 percent Fibonacci retracement of the 2007-2009 bear market slide. The key technical level has proven to be an obstacle in recent sessions and could lead to more gains.

S&P 500 futures rose 2.7 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 6 points, while Nasdaq 100 futures added 2 points.

Shares of Netflix Inc jumped after Standard & Poor's said the movie rental company along with F5 Networks Inc and Newfield Exploration Co will replace Office Depot Inc , New York Times Co and Eastman Kodak Co in the S&P 500.

As well, Cablevision Systems Corp will replace King Pharmaceuticals Inc , which is being bought by Pfizer Inc

Netflix rose 4 percent to $198.70 in premarket trading, F5 climbed 3.7 percent to $144.10 and Newfield Exploration gained 2.9 percent to $72.08.

On the data front, the U.S. trade deficit narrowed much more than expected in October, while import prices in November rose at their fastest pace in a year.

Preliminary December consumer sentiment index is on tap at 9:55 a.m. EST (1455 GMT), with a reading of 72.5 expected, compared with 71.6 in the final November report.

Tenet Healthcare Corp surged 51.5 percent to $6.50 after Community Health Systems Inc offered to buy it for $3.3 billion, but Tenet rejected the bid. Community Health was down 3.6 percent at $30.50.

A tentative compromise between President Barack Obama and congressional Republicans to extend tax breaks hit opposition from prominent Democrats, but failed to rattle investors Thursday.

(Editing by Jeffrey Benkoe)