Futures tick higher on Spanish bailout hopes

U.S. stock index futures rose in low volume on Tuesday on expectations the Spanish government will soon request a bailout, a step some see as necessary to alleviate the euro zone's debt crisis.

Spanish 10-year bond yields were near session lows below 5.77 percent and the domestic equity market benchmark <.IBEX> gained 1.3 percent. <.EU>

"I think the market feels that we are closer to some type of action and resolution in terms of the Spanish problem," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. "That's certainly helping markets this morning."

Uncertainty remains and markets could be volatile, as despite Spain's readiness to ask for financial help Germany has signaled that it should hold off, according to European officials on Monday.

In the first action to come out of a working group created by U.S. President Barack Obama earlier this year to go after wrongdoing that led to the financial crisis, the New York Attorney General filed a civil fraud lawsuit against JPMorgan Chase & Co on Monday over mortgage-backed securities packaged and sold by Bear Stearns.

JPMorgan shares fell 0.5 percent in light premarket trading.

S&P 500 futures rose 7.6 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 rose 47 points, and Nasdaq 100 futures added 13 points.

PetSmart Inc will replace Sunoco Inc in the S&P 500 after the close of trading on October 4, S&P Dow Jones Indices said after the close on Monday.

Wall Street started a new quarter with a modest rally on Monday, lifted by a surprising expansion in U.S. manufacturing in September.

The Dow Jones industrial average <.DJI> rose 77.98 points, or 0.58 percent, to 13,515.11. The S&P 500 <.SPX> advanced 3.82 points, or 0.27 percent, to1,444.49. The Nasdaq Composite <.IXIC> dipped 2.70 points, or 0.09 percent, to close at 3,113.53.

(Reporting by Rodrigo Campos; Editing by Chizu Nomiyama)