* Biotech stocks edge up, continuing recent rally
* Best Buy tumbles after results, DSW higher
* Digital Ally gains before bell, has tripled this month
* Futures up: Dow 24 pts, S&P 2.5 pts, Nasdaq 7.25 pts
(Updates prices, adds DSW results)
By Ryan Vlastelica
NEW YORK, Aug 26 U.S. stock index futures
pointed to very slight gains at the open on Tuesday, with
investors finding few reasons to buy after a rally in the
previous session that took the S&P 500 index above 2,000 for the
* The benchmark S&P failed to hold that level Monday, but
ended at a new closing high. Equities have rallied lately, with
the Dow and S&P advancing in seven of the last 10 sessions, and
the Nasdaq climbing in eight.
* That momentum is still considered intact, and the S&P's
price-to-earnings ratio is within historical norms, leading many
analysts to believe the market is not overvalued. Nonetheless,
further gains may be a challenge without positive catalysts and
amid potential headwinds such as a reduction in Federal Reserve
stimulus and a simmering conflict between Ukraine and Russia.
* Much of the market's recent gains have come on low volume,
suggesting many traders may be reluctant to jump in at current
* Among Tuesday's biggest premarket movers, Best Buy Co Inc
reported second-quarter revenue that missed expectations
and forecast a drop in same-store sales in the second half of
the year. Its shares fell 3 percent in premarket trading.
DSW Inc rose 11 percent in premarket
trading after its adjusted earnings topped forecasts.
* S&P 500 e-mini futures rose 2.5 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 e-mini futures
added 24 points and Nasdaq 100 e-mini futures
added 7.25 points.
* Biotechnology stocks were among the biggest drivers during
Monday's rally. That appeared to continue Tuesday, with Kite
Pharma Inc up 18 percent to $26.38 after positive
results in an early-stage study for an experimental cancer
immunotherapy. Achillion Pharmaceuticals
was up 4.8 percent to $11.30 before the opening bell.
Gilead Sciences Inc rose 0.9 percent to $108.37.
* Digital Ally Inc jumped 12 percent to $14.01 in
premarket trading, extending a recent surge that has seen shares
of the wearable camera maker more than triple this month alone.
The recent fatal police shooting of an unarmed black teenager in
Missouri has fueled interest in the company's devices. The stock
was one of the Nasdaq's heaviest premarket movers.
* Amazon.com Inc late Monday agreed to buy the
live-streaming gaming network Twitch Interactive for about $970
million in cash. Shares rose 0.7 percent to $336.50.
* Durable goods jumped 22.6 percent in July, the biggest
gain on record, though the number was skewed by strong
international demand for aircraft. Excluding transportation,
orders fell 0.8 percent.
(Editing by Bernadette Baum)