* Worry Rome's elections could add to euro-zone problems
* S&P 500 coming off biggest daily drop since Nov. 7
* Bernanke to deliver semiannual economic report at 10 a.m.
* Home Depot rises as profit, sales top expectations
* Futures up: Dow 38 pts, S&P 3.9 pts, Nasdaq 5.75 pts
By Ryan Vlastelica
NEW YORK, Feb 26 U.S. stock index futures rose
on Tuesday, indicating equities would partially rebound from a
steep drop over Italian election results as investors saw
opportunities to buy beaten-down shares.
Market participants speculated a coalition government would
eventually emerge in Italy and ease worries about a new euro
zone debt crisis.
Groups in Italy opposed to economic reforms posted a strong
showing, resulting in a political deadlock with a comedian's
protest party leading the poll and no group securing a clear
majority in parliament.
"We've gone to an environment of political stability to
instability, and until we get some type of clarity over who is
in charge, which could take days, the market will have renewed
concerns," said Art Hogan, managing director of Lazard Capital
Markets in New York.
"Investors are taking advantage of the drop, and once some
kind of coalition government is formed most of our concerns will
be put to rest," Hogan said.
S&P 500 futures rose 3.9 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 38
points and Nasdaq 100 futures rose 5.75 points.
Major indexes fell more than 1 percent on Monday, with the
S&P 500 having its biggest daily drop since November as
investors fretted that if Italy does not undertake reforms, that
could once again destabilize the euro zone. European equities
, which closed before the results on Monday, fell 1.1
Investors will pay close attention to the first of two days
of congressional testimony by Federal Reserve Chairman Ben
Bernanke for insight into the central bank's view of the
economy, as well as the outlook for its bond buying program.
Last week, equities fell on concerns the program might end
sooner than had been anticipated.
Bernanke appears before the Senate Banking Committee at 10
a.m. (1500 GMT).
Economic data will include the CaseShiller report on
December home prices at 9 a.m. (1400 GMT). Analysts expect a 0.5
percent rise. January consumer confidence is scheduled for 10
a.m. and is seen rising to 61.0 from 58.6 in the previous month.
New-home sales for January also are due at 10 a.m.
The rise in U.S. futures suggests that a recent trend of
investors buying on dips will continue. Last week, concerns the
Fed might roll back its stimulus policy earlier than expected
prompted a sharp two-day decline, though equities recovered most
of the lost ground by the end of the week.
Financial shares may be among the most volatile, as the
group is closely tied to the pace of global economic growth.
Morgan Stanley was one of the top percentage losers on
the S&P on Monday, dropping more than 6 percent on concerns
about the company's exposure to European debt. It rose 0.8
percent to $22.20 in premarket trading on Tuesday.
Dow component Home Depot Inc, the world's largest
home improvement retailer, reported adjusted earnings and sales
that beat expectations. Its stock rose 1.5 percent to $64.90 in
For the benchmark S&P 500 index, 1,500 will be watched as a
key level after the index closed below it on Monday for the
first time since Feb. 4, with selling accelerating after falling
below it. An inability to break back above it could portend
The S&P remains 4.3 percent higher on the year. With 83
percent of the S&P 500 having reported so far, 69 percent beat
profit expectations, compared with a 62 percent average since
1994 and 65 percent over the past four quarters, according to
Thomson Reuters data. Fourth-quarter S&P earnings are seen
having risen 6 percent, above a 1.9 percent forecast at the
start of the earnings season.