Wall Street was set for a higher open on Tuesday after Italian bond yields fell from session highs amid hopes a meeting of European finance ministers will be a step forward in resolving the region's debt crisis.
Italian government bond yields fell from session highs after a sale of 7.5 billion euros in bonds, but were mostly still up on the day.
German Bunds reversed early gains on relief the sale drew enough demand and on hopes policymakers would make progress in tackling the debt crisis at meetings this week.
Investors also eyed a meeting of Eurogroup ministers to discuss the details for bolstering a bailout fund, according to documents obtained by Reuters.
From a trader's perspective, all you needed was a couple of decent headlines to change sentiment, and we've had that with news from Europe and holiday spending, said Todd Schoenberger, managing director at Landcolt Trading in Wilmington, Delaware.
S&P 500 futures rose 1.9 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 15 points, and Nasdaq 100 futures rose 4 points.
According to a French newspaper report, Standard & Poor's could change the outlook for France's triple-A rating to negative within the next 10 days.
Also, Moody's said it could downgrade the subordinated debt of 87 banks across 15 European Union nations on concerns that governments would be too cash-strapped to bail them out.
Late Monday, Fitch revised its outlook on the U.S. credit rating to negative, citing the failure of a special congressional committee to reach an deficit-reduction agreement. Fitch gave the United States until 2013 to come up with a credible plan to tackle its ballooning budget deficit or risk a downgrade of the country's coveted AAA rating.
In company news, AMR Corp
Shares of Tiffany & Co
Data showed U.S. single-family home prices declined in September, highlighting the fragility of the struggling housing market. Market reaction was muted.
The Conference Board's November consumer confidence is due at 10 a.m. EST. The report is forecast to show a reading of 44.0, up from 39.8.
U.S. stocks rebounded from seven days of losses on Monday as investors used the latest effort by European leaders to resolve the region's debt crisis as an opportunity to cover short positions.
(Reporting by Angela Moon; editing by Jeffrey Benkoe)