* Icahn opens door to Blackstone tie-up on Dell bid
* Demand for long-lasting U.S. goods surged in February
* Home prices up in Jan, best yearly increase since 2006
* Futures up: Dow 29 pts, S&P 3.8 pts, Nasdaq 7 pts
NEW YORK, March 26 Wall Street was set to rise at the open on Tuesday after data showed the economy continues to slowly improve, which could lift the S&P 500 closer to its record high.
Data could support a move higher on stocks. U.S. single-family home prices rose in January, starting the year with the biggest annual increase in six-and-a-half years in a fresh sign the housing market recovery remains on track.
Demand for long-lasting U.S. manufactured goods surged in February, suggesting factory activity continued to expand at a moderate pace, even though a gauge of planned business spending slipped after surging the previous month.
The benchmark S&P 500 index traded just a quarter point below its all-time closing high on Monday, then retreated as investors cashed in gains in the wake of news out of Europe.
"So far the catalysts for the pullbacks have been external," said Art Hogan, managing director at Lazard Capital Markets in New York, regarding the two sharp declines in U.S. equities so far this year, following elections in Italy and the recent bailout deal for Cyprus.
"For today, we're moving forward, and the euro zone continues to be the only negative."
Banks in Cyprus will remain closed until Thursday, and will then be subject to capital controls to prevent a run on deposits. President Nicos Anastasiades said late on Monday that a 10 billion euro ($13 billion) rescue plan agreed at the weekend was "painful" but essential to avoid economic meltdown.
The euro edged higher against the U.S. dollar but remained near four-month lows on lingering concerns about the negative implications of the Cypriot rescue plan, and if it would serve as a template for other euro zone economies requiring bailouts.
S&P 500 futures rose 3.8 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 rose 29 points, and Nasdaq 100 futures added 7 points.
At 10:00 a.m. EDT (1400 GMT), the Conference Board releases March consumer confidence data and the Commerce Department releases February data on new home sales.
Michael Dell's $24.4 billion buyout bid for Dell Inc could be derailed after billionaire Carl Icahn opened the door to an alliance with Blackstone Group LP to take control of the computer maker from its founder.
Goldman Sachs Group and Berkshire Hathaway have amended the warrants Berkshire holds as part of the lifeline it gave Goldman during the financial crisis, a change that Goldman said would ensure Berkshire remains a long-term investor in the bank. Goldman shares rose 1.3 percent in premarket trading.