Wall Street was set for a modestly higher open on Wednesday, potentially bouncing back from two sessions of losses as investors regained some optimism about the strength of the market rally.

Health insurers could rise after Senate Democratic healthcare negotiators said they agreed to replace a government-run insurance option with a scaled-back non-profit plan.

Shares of Corning Inc gained 1.5 percent to $18.15 ahead of the opening bell after it raised its forecast for fourth-quarter glass volume and said the 2010 LCD glass market could be larger than previously thought.

The inverse correlation between equities and the U.S. dollar also appeared intact as the greenback <.DXY> slipped 0.2 percent against a basket of currencies.

After a market rally of more than 60 percent from March's 12-year low, stocks have drifted in recent sessions as investors locked in profits and looked ahead to the new year. With the broad S&P 500 up nearly 21 percent for 2009, investors are reluctant to lose any gains.

Traders want to know if this is the start of a new trend downward or just a reaction to news that snaps back, said Barry Ritholtz, director of equity research at Fusion IQ in New York. So far it looks like the bet is this is going to be a modest snap back after (a) fall.

Stocks fell 1 percent on Tuesday after disappointing corporate news from 3M Co and McDonald's Corp , while negative developments in global credit markets caused a shift to safe-haven assets.

S&P 500 futures rose 0.8 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 9 points, while Nasdaq 100 futures added 2.50 points.

The Obama administration plans to announce on Wednesday it intends to extend the life of the $700 billion financial bailout fund until next October, administration officials said. The move should help soothe worries officials would remove efforts to prop up the economy too soon.

Sprint Nextel Corp jumped 5.1 percent to $4.11 after Citigroup raised its rating to buy, partly on the idea of a possible tie-up with Deutsche Telekom.

Chip maker Texas Instruments Inc raised its current-quarter profit forecast and said revenue would reach the high end of its target. But it disappointed some investors who had hoped for a stronger outlook on signs of improving demand in the wider chip market, and its stock fell about 2.1 percent to $25.78 in premarket trades.

PepsiCo Inc
lowered the top end of its revenue and earnings outlooks as it steps up investments in projects aimed at increasing its growth and profitability amid falling North American soft drink sales. Pepsi was down 1.5 percent at $62.51.

(Editing by Padraic Cassidy)