Wall Street was set to open higher on Wednesday as Spain said it would take wide austerity measures, further easing jitters over euro-zone sovereign debt woes.
The euro strengthened and European shares rose after Spain's announcement. The FTSEurofirst 300 <.FTEU3> gained 1.2 percent, with financial services firm ING Groep leading the sector on strong results.
Investors have feared a debt crisis in Greece could spill over to other euro-zone nations with high debt loads, including Spain.
Spain's Prime Minister Jose Luis Rodriguez Zapatero said Madrid would slash civil service pay by 5 percent this year, freeze it in 2011 and cut 13,000 public sector jobs this year to meet European Union deficit targets.
Spain's move followed a 750 billion euro ($1 trillion) rescue plan late Sunday to stop the debt woes from spreading, cheering U.S. investors.
There are certainly those people who will see the steps taken in Europe as a replay of the type of steps taken in the U.S. following the Lehman collapse, said Rick Meckler, president of investment firm LibertyView Capital Management in New York. Ultimately that proved to be successful in the short run for markets.
Concerns over a spreading debt crisis have been the biggest fear for U.S. equity players, and as that fear subsides, we're more likely to see a positive spin to the market, Meckler added.
S&P 500 futures rose 7.1 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 added 40 points, and Nasdaq 100 futures gained 12.25 points.
Shares of Walt Disney Co fell 3.2 percent to $34.63 in premarket trading after the entertainment and media group reported lower ratings and ad revenues as well as higher costs despite better-than-expected quarterly earnings.
Also on the earnings front, video games maker Electronic Arts Inc tumbled 5.4 percent to $17.78 a day after its quarterly profit topped estimates but were not as strong as investors expected.
U.S. investigators are probing whether Morgan Stanley misled investors about mortgage derivative product it sold and sometimes bet against, the Wall Street Journal reported, citing sources. Morgan Stanley shares were down 3.1 percent at $27.51 premarket.
The Dow and the S&P 500 fell in a volatile session on Tuesday on concerns about euro-zone debt.
Analysts said recent market volatility has obscured strong economic fundamentals, including last week's jobs report that showed employment grew at the fastest pace in four years in April.
As investors shift attention from Europe's sovereign debt troubles, the focus will return to the U.S. economic recovery, though choppiness in trading could persist.
The market has been increasingly conditioned to buy on the dips now that the situation in Europe has been not resolved but certainly stabilized in the short term, said Craig Peckham, equity trading strategist at Jefferies & Co in New York.
Top oil executives will face a second day of questioning from U.S. lawmakers over a deadly well rupture that unleashed a huge oil slick in the Gulf of Mexico.
Following last week's dramatic intraday plunge in U.S. markets, securities regulators sent out subpoenas as they seek to uncover the cause of the drop.
(Editing by Jeffrey Benkoe)