US STOCKS-Futures point to slight gains at the open

Fri Nov 1, 2013 8:46am EDT

* Major indexes coming off two days of losses

* First Solar jumps after results, outlook

* ISM manufacturing index on tap, seen edging lower

* Futures up: Dow 39 pts, S&P 4.6 pt, Nasdaq 7.5 pts

By Ryan Vlastelica

NEW YORK, Nov 1 (Reuters) - U.S. stock index futures pointed to slight gains at the open on Friday, indicating a Wall Street rebound following two days of losses spurred by concerns over Federal Reserve policy.

Equities have been pressured since a Fed statement on Wednesday raised concerns about when the central bank would begin to scale back its stimulus program, which has contributed to the S&P 500's advance of 23 percent this year.

The rally has taken the Dow and S&P repeatedly to record highs, leading some analysts to call for a pullback, especially amid some signs of slowing growth, like weak economic data and an earnings season marked by tepid revenue.

"Investors continue to buy the dips as they believe the Fed will hold steady for a while, and that's helping to give us a bounce today," said Robert Pavlik, chief market strategist at Banyan Partners LLC in New York.

"I would be somewhat cautious about reentering the market so quickly, since there still are headwinds out there and we haven't pulled back very much from our highs."

Chevron Corp was the latest company to disappoint on results, posting third-quarter revenue that was below expectations. Shares of the Dow component were flat in premarket trading.

Investors await the Institute for Supply Management's October read on manufacturing, due at 10:00 a.m. EDT (1400 GMT). The index is seen falling to 55 from 56.2 in the previous month.

Recent economic data has been mixed, with the most recent ADP National Employment Report coming in below expectations but the Chicago Purchasing Manager's Index sharply above forecasts. While weak data has been a concern, strong data has spurred selling on expectations it may encourage the Fed to slow its stimulus - something the central bank has said it would do once growth meets its targets.

S&P 500 futures rose 4.6 point 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 39 points and Nasdaq 100 futures rose 7.5 points.

For the week thus far, both the Dow and S&P are down 0.2 percent, coming off three straight weeks of gains, while the Nasdaq has slipped 0.6 percent.

On Wednesday, the Fed said it would keep buying $85 billion of bonds per month, but removed a phrase from a previous statement expressing worries about credit conditions, which some investors interpreted as a sign that the Fed could begin tapering stimulus earlier than expected. Previously, market participants were anticipating that the stimulus plan would not change until at least early next year.

In company news, American International Group Inc reported third-quarter earnings late Thursday that slightly beat expectations, though analysts had expected better results in the insurer's consumer lines business. Shares fell 4.5 percent to $49.31 in premarket trading.

U.S. shares of Vodafone Group edged 0.3 percent lower to $36.97 in premarket trading following a Bloomberg report which said AT&T Inc was exploring strategies for a potential takeover of the British mobile operator, citing people familiar with the matter. AT&T rose 0.3 percent to $36.30 before the bell.

Solar companies will be in focus after First Solar Inc posted results that beat expectations and raised its full-year profit outlook. Shares jumped 9 percent to $54.83 in premarket trading.

With about 71 percent of S&P 500 companies having reported, 68.2 percent have topped Wall Street's expectations, above the long-term average of 63 percent, according to Thomson Reuters data. However, only 53.6 percent have topped revenue forecasts, below the 61 percent average since 2002.

"Earnings have generally been positive, but it isn't impressive that companies are able to meet lowered expectations," Pavlik said. "The weak revenue is concerning."