* Bank of America climbs in premarket after earnings
* Empire State manufacturing, PPI increase
* Futures up: Dow up 29, S&P up 3.8 Nasdaq up 13.25
By Chuck Mikolajczak
NEW YORK, Jan 15 (Reuters) - U.S. stocks were poised to rise at the open on Wednesday, indicating the S&P 500 will build on its biggest gain in nearly a month, after strong data and earnings from Bank of America pointed to continued improvement in the economy.
Bank of America shares climbed 2.7 percent to $17.22 before the opening bell after the second-largest U.S. bank reported a stronger-than-expected quarterly profit, driven by a steep fall in provisions to cover bad loans.
Futures initially dipped after data showed the seasonally adjusted producer price index rose 0.4 percent last month, the biggest rise since June, after slipping 0.1 percent in November. However, inflation pressures remained benign.
In addition, the New York Federal Reserve’s “Empire State” index of general business conditions rose to 12.51 in January, its highest since May 2012. Economists polled by Reuters had expected a reading of 3.75.
“That is in line with the theme the economy is slowly but surely accelerating,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
“The knee-jerk inflation is ‘oh my god higher inflation, the Fed is going to accelerate tapering,’ but really this was a very minor increase and it really doesn’t show the economy or inflation accelerating to a point where the Fed is ready to take its foot off the accelerator.”
Investors have recently been concerned that stock prices may have become extended. The S&P 500’s forward price to earnings ratio is at its highest level in nearly seven years. The benchmark S&P 500 surged about 30 percent in 2013.
Later in the session at 2:00 p.m. (1900 GMT), the Federal Reserve will release its Beige Book of economic conditions.
S&P 500 futures rose 3.8 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 gained 29 points and Nasdaq 100 futures added 13.25 points.
The S&P 500 rose 1.1 percent on Tuesday, its biggest climb since Dec. 18, as a strong December retail sales reading eased concerns that economic growth might be slowing and stocks may be expensive.
Other S&P 500 companies scheduled to report earnings on Wednesday include CSX Corp and Kinder Morgan Inc .
General Motors Co said it will pay the first quarterly dividend on its common stock in almost six years. The automaker’s new executive team said while it expects a slight uptick in pretax profits this year, margins likely would remain flat until 2015. GM’s shares lost 1.3 percent to $39.52 in premarket trading.
Chelsea Therapeutics International Ltd surged 156.5 percent to $5.90 in premarket after an advisory panel to the U.S. Food and Drug Administration concluded on Tuesday a drug to treat a rare form of low blood pressure made by the company is effective enough to warrant regulatory approval.