* Volatility expected ahead of Friday's payroll report
* Fed's Dudley to speak about national economic conditions
* Factory orders for May scheduled for 10 a.m.
* Pfizer, Novartis may bid for Onyx: sources
* Futures up: Dow 26 pts, S&P 4.5 pts, Nasdaq 8.25 pts
(Updates prices, adds analyst comment)
By Ryan Vlastelica
NEW YORK, July 2 U.S. stock index futures rose
modestly on Tuesday, indicating positive market momentum would
persist as investors remain optimistic about the economic
Sentiment has improved since Federal Reserve officials
reassured investors that the central bank's bond-buying stimulus
policy wasn't ending imminently. However, the S&P 500 remains
more than 3 percent below its record closing high.
"We're seeing a retracement of a sell-off that was based in
fear, though the market will likely continue to be emotional,"
said Oliver Pursche, president of Gary Goldberg Financial
Services in Suffern, New York.
William Dudley, the president of the New York Fed, will
speak at 12:30 p.m. (1630 GMT) about national economic
conditions. His comments will be closely scrutinized for clues
about when the Fed might begin to scale back its quantitative
May factory orders will be released at 10 a.m. (1400 GMT) by
the government, and economists polled by Reuters expect a rise
of 2 percent, twice the rate of the previous month.
Data on the Institute for Supply Management's New York
regional business activity is also on tap for Tuesday, leading
up to Friday's closely watched June payrolls report.
Wall Street has had a divided attitude toward U.S. data, as
bullish reports sparked declines on concerns any sign of a
strong economy will cause the Fed to move up the tapering its
"Today's move will likely come down to whether we see a
strong reaction to the data," Pursche said. "We'll likely be
very unpredictable ahead of the payrolls report."
S&P 500 futures rose 4.5 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 futures added 26
points, and Nasdaq 100 futures were up 8.25 points.
Equities surged in the first half of the year, hitting a
series of record highs before pulling back dramatically in June
on concerns the Fed would begin reining in its stimulus, which
helped fuel 2013's gains.
While stocks closed higher on Monday on strong manufacturing
and construction data, they ended well off their highs of the
session. The S&P lost more than half of its gains, a sign of
investor caution. More volatility is expected as the economy
eventually moves to a no-stimulus environment.
In corporate news, alcoholic beverage company Constellation
Brands Inc fell 4 percent to $51.04 in premarket trading
after the company reported first-quarter revenue that was below
Sources said Pfizer Inc and Novartis AG
may make preliminary bids for Onyx Pharmaceuticals Inc.
On Sunday, Onyx turned down a roughly $10 billion offer from
Zynga Inc rose 3.2 percent to $3.23 in premarket
trading after naming Don Mattrick, the head of Microsoft's
Xbox business, as its chief executive.
(Editing by Jeffrey Benkoe and Kenneth Barry)