* Cyprus to spin off Greek units of its battered banks
* ECB to cut off bank funds without bailout deal by Monday
* S&P 500 off nearly 1 pct for the week
* Futures up: S&P 3.6 pts; Dow 42 pts; Nasdaq 7.25 pts
By Angela Moon
NEW YORK, March 22 Wall Street was set for a slightly higher open on Friday as a banking deal between Greece and Cyprus eased some concerns about the island nation as it tries to avoid a financial meltdown and an exit from the euro that could roil the euro zone.
Cyprus agreed with Greece on a takeover of the Greek units of Cypriot banks, which ended uncertainty over the fate of those operations.
"The U.S. market has been sort of a separate market (from global markets) and we are seeing that again today. While the investors are eyeing the situation in the Cyprus, the feeling is that something will be done," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
"We may adjust technically today after the decline we had yesterday. It's a good opportunity to buy."
Russia has rebuffed Cypriot entreaties for aid, leaving the island's leaders scrambling to strike a bailout deal with the European Union by next week or face the collapse of its financial system.
The European Union has given Cyprus until Monday to raise 5.8 billion euros to secure a 10-billion euro international bailout. Parliament has already rejected one deal.
S&P 500 futures rose 3.6 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 were up 42 points while Nasdaq 100 futures added 7.25 points.
Tiffany & Co reported a slightly higher profit for the quarter that included the holiday season and said net worldwide sales would rise 6 percent to 8 percent this fiscal year, with growth in all regions. The stock was up 3.8 percent in premarket trade.
Blackstone Group LP and General Electric Co's lending arm have discussed jointly pursuing Dell Inc's financial-services business, the Wall Street Journal reported, citing people familiar with the matter. Shares of Blackstone Group rose 1 percent and GE shares were up 0.7 percent in premarket trading.
Worries about the financial health of Cyprus have weighed on Wall Street in recent days, pushing the S&P 500 down nearly 1 percent for the week.
"The next few hours will determine the future of the country," Cypriot government spokesman Christos Stylianides said before a parliamentary debate on Friday. "We must all assume our share of the responsibility."