NEW YORK -
Stock futures rose on Tuesday, indicating equities could extend a rally that took them to nearly two-month highs on growing optimism over a "fiscal cliff" deal.
Stocks have struggled for direction in recent weeks, with investors reluctant to make big bets in the face of uncertainty over the cliff, a combination of steep tax hikes and spending cuts that could hurt the U.S. economy if they take effect next year. Moves have been muted over the past weeks, with volume anemic.
Hopes for a deal grew on Monday night as President Barack Obama made a counter-offer to Republicans that included a major change in position on tax hikes for the wealthy, according to a source familiar with the talks.
That report followed a meeting between Obama and Republican House Speaker John Boehner, who has edged closer to Obama's position by proposing to extend lower tax rates for everyone who earns less than $1 million.
Many investors fear that going over the fiscal cliff could push the U.S. economy back into recession, an outcome that would also pressure global growth and sap demand for commodities.
"Neither side appears to be digging in their heels so much, and that increases the optimism there might be a deal," said Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, New York. "Political risks have been the main thing suppressing market gains, so if those abate we could see a rally that is significant."
S&P 500 futures rose 5.5 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 30 points and Nasdaq 100 futures rose 18 points.
European shares <.FTEU3> rose 0.3 percent on Monday, while January crude futures were up 0.6 percent. The MSCI index of global stocks <.MIWD00000PUS> rose 0.2 percent.
While the cliff has been the primary driver for markets, tech shares will also be in view as Oracle Corp
Reporting quarterly results early on Tuesday, Sanderson Farms Inc
The New York Times late Monday said that Wal-Mart Stores Inc's
U.S. third-quarter current account figures are due to be released at 8:30 a.m. (1330 GMT). Economists in a Reuters survey forecast a $103.4 billion deficit versus a deficit of $117.4 billion in Q2.
Hopes for a fiscal cliff deal lifted shares on Monday, breaking a two-day decline for the S&P. The Dow and Nasdaq surged more than 1 percent in Monday's session, while all 10 S&P 500 sectors ended higher.
(Editing by Kenneth Barry)