* ISM manufacturing, construction spending data on tap
* Delta among suitors for Virgin Atlantic stake- sources
* Dish Network declares special dividend
* Futures up: Dow 71 pts, S&P 6.8 pts, Nasdaq 18 pts
By Rodrigo Campos
NEW YORK, Dec 3 (Reuters) - U.S. stock index futures rose on Monday on upbeat factory data from China, but concerns over budget dealings in Washington are expected to keep traders cautious.
China’s economy picked up in November even as a broader global recovery remains fragile, with factory activity patchy elsewhere in Asia as demand from the developed world remains depressed.
“The good news out of China is encouraging and that’s adding to the risk trade this morning,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
Markets have focused for weeks on negotiations in Washington over some $600 billion in spending cuts and tax hikes scheduled to kick in next year that could tip the U.S. economy back into recession.
U.S. Treasury Secretary Timothy Geithner pushed Republicans on Sunday to offer specific ideas to cut the deficit and predicted that they would agree to raise tax rates on the rich to obtain a year-end deal to avoid the “fiscal cliff.”
“Right now for both sides it’s all about staying firm and determined to go to the very end,” Cardillo said. “But we all know the stakes are high and (Congress) can’t be that stupid as to induce another recession.”
Included in the negotiations are hikes on dividend taxes, and several U.S. companies have declared special pay backs to shareholders ahead of possibly higher tax burdens.
The latest to join the list was Dish Network, which declared a one-time dividend of $1 per share. National Penn Bancshares declared a quarterly cash dividend of ten cents per share payable before the end of this year.
S&P 500 futures rose 6.8 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 rose 71 points, and Nasdaq 100 futures added 18 points.
The S&P 500 on Friday closed its fifth positive month in six and is up 8 percent since the end of May.
Greece said it would spend 10 billion euros to buy back bonds in a bid to reduce its ballooning debt and unfreeze long-delayed aid, setting a price range above market expectations to ensure sufficient investor interest. The buyback is central to the efforts of Greece’s foreign lenders to put the near-bankrupt country’s debt back on a sustainable footing.
The Institute for Supply Management releases its November manufacturing index at 10 a.m. (1500 GMT). Economists in a Reuters survey expect a reading of 51.3 for the main index versus 51.7 in October.
Also at 10 a.m., the Commerce Department releases October construction spending data. Economists forecast a rise of 0.5 percent compared with a 0.6 percent rise in September.
Singapore Airlines said it was in talks with interested parties to sell its 49 percent stake in British carrier Virgin Atlantic, with sources saying that Delta Air Lines was among the potential suitors.