U.S. stock index futures rose on Friday as investors stepped back into equities ahead of a much-anticipated speech by Federal Reserve Chairman Ben Bernanke.
Bernanke, addressing a symposium of central bankers in Jackson Hole, Wyoming, will likely acknowledge the Fed is actively considering a third round of quantitative easing in his keynote speech at 10:00 a.m. ET (1400 GMT).
Trading was thin this week and lacking dramatic price moves, but on Thursday, investors took decisive action to lock in profits ahead of the speech. Stocks dropped solidly, with the Nasdaq down more than 1 percent and the S&P closing below 1,400 for the first time since August 6.
"I don't make much of the move in futures, which is mostly a bounce back from yesterday, but there's still room to move if Bernanke says something of substance," said Scott Freeze, president of StreetOne Financial in Huntington Valley, Pennsylvania.
"If he disappoints or we just get the standard rhetoric, we could see a drop of 1 to 1.5 percent (in the S&P 500), but if he's encouraging about QE we could see a 2 percent pop."
Markets have advanced in recent months, buoyed by expectations for a third round of quantitative easing. Thursday's retreat could indicate that the market is now less vulnerable for a selloff, though financial market participants remain cautious ahead of the Fed speech, as well as a meeting of the European Central Bank on Thursday that is expected to take pressure off highly indebted countries.
Sectors tied to the pace of economic growth, including energy and financials, are likely to be impacted the most by Bernanke's remarks. Defensive groups like utilities or health care may have a more muted reaction.
S&P 500 futures rose 8.3 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 80 points and Nasdaq 100 futures rose 21 points.
For the week, the S&P is down 0.8 percent, though the index barely budged over the first three sessions of the week - resulting in a decline of just 0.05 percent. The Dow is down 1.2 percent for the week and the Nasdaq is off 0.7 percent.
Turnover has been paltry, with this week's four days so far being among the five lowest in terms of volume this year.
Economic data is also due, though it unlikely to be a significant market driver. The Institute of Supply Management Chicago releases its August index of manufacturing activity at 9:45 a.m. ET (1345 GMT). Economists forecast a reading of 53.5, compared with 53.7 in July.
In addition, the Thomson Reuters/University of Michigan Surveys of Consumers releases the final August consumer sentiment index at 9:55 a.m. (1355 GMT) and analysts see a reading of 73.6, a repeat of the preliminary August figure. July factory orders, due at 10 a.m., are seen rising 1.9 percent.
Economic data over the past two weeks has been a little stronger than expected, and Reuters polls show investors and economists are more skeptical that the Fed will announce a new round of bond buying at its September meeting.
In company news, Google Inc Chief Executive Larry Page and Apple CEO Tim Cook have been conducting behind-the-scenes talks about a range of intellectual property matters, including the mobile patent disputes between the companies, people familiar with the matter said.
Science Applications International Corp said late Thursday it plans to split into two independently traded companies to bid for more contracts which they cannot do now due to conflict-of-interest regulations. The stock rose 8 percent to $12.76 before the bell.
(Editing by Bernadette Baum)