* Worry Rome's elections could add to euro-zone problems
* S&P 500 coming off biggest daily drop since Nov. 7
* Bernanke to testify on economy at 10 a.m.
* Home Depot rises as profit, sales top expectations
* Futures up: Dow 43 pts, S&P 6 pts, Nasdaq 7.25 pts
By Ryan Vlastelica
NEW YORK, Feb 26 U.S. stock index futures
pointed to a higher open on Tuesday, indicating equities would
partially rebound from a steep drop over Italian election
results as investors saw opportunities to buy beaten-down
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, the
euro zone could once again be destabilized. European equities
, which closed before the results on Monday, fell 1.1
Groups in Italy opposed to economic reforms posted a strong
showing in the recent election, 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.
Still, market participants speculated a coalition government
would eventually emerge in Italy and ease worries about a new
euro zone debt crisis.
The rise in U.S. futures suggested the recent trend of
investors buying on dips would continue. Last week, concerns the
Fed might roll back its stimulus efforts earlier than expected
prompted a sharp two-day decline, though equities recovered most
of the lost ground by the end of the week.
"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.
Dow component Home Depot Inc will be in focus after
the company reported adjusted earnings and sales that beat
expectations, sending shares up 2.6 percent to $65.59 in
Macy's Inc rose 3.8 percent to $40 after stating it
expects full-year earnings to be above analysts' forecasts
because of strong sales in the holiday period.
S&P 500 futures rose 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 added 43
points and Nasdaq 100 futures rose 7.25 points.
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
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.
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).
Among economic reports, home prices rose 0.9 percent in
December, according to the Standard & Poor's/Case-Shiller index.
That was more than the 0.5 percent gain expected. Futures showed
little impact from the data.
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 S&P remains 4.3 percent higher on the year, helped by
strong corporate earnings, as well as a backdrop of
accommodative monetary policy from the Fed.
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.