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U.S. stock-index futures climbed Tuesday after Wall Street's worst selloff since November as traders awaited testimony from Fed chief Bernanke and digested a round of better-than-expected housing data.
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As of 9:05 a.m. ET, Dow Jones Industrial Average futures rose 47 points to 13835, S&P 500 futures climbed 5.8 points to 1493 and Nasdaq 100 futures gained 7 points to 2709.
After months on the back burner, European worries came hurdling back into the picture Monday after elections in Italy ended in a stalemate. The country's Senate now stands divided -- not a single party controls the upper house. That means multiple parties will have to come together and form a coalition government, or a fresh round of elections may need to be called.
More importantly, perhaps, the sudden lurch higher in political instability threatens to once again ignite concerns about the embattled 17-member currency bloc. Tina Fordham, an analyst covering the subject for Citigroup, called the election the "pivotal political event" for the eurozone this year, and warned that the result "extends political risk."
The broad S&P 500 took its biggest fall since November on the news Monday, while European markets have come under heavy pressure. Of particular concern is Italian and Spanish borrowing costs -- both of which have spiked in the secondary markets.
"We expect risky assets to remain under pressure until the picture in Italy becomes clearer," analysts at Barclays warned in a note to clients. The investment bank said safe havens like U.S. Treasury bonds, German bunds and the dollar should benefit.
The U.S. economy is likely to come into focus later in the session. Federal Reserve Chairman Ben Bernanke is set to testify before the Senate Banking Committee on monetary policy. Last week, minutes from the Fed's late January meeting suggesting the central bank could begin taper asset purchases (quantitative easing) sooner than expected hit the markets hard.
"Markets are likely to be particularly sensitive to any nuance in the Chairman's comments that might affect the duration of" quantitative easing, analysts at Nomura wrote in a note to clients.
"This includes how the Chairman characterises - labour market developments, inflation prospects, the impact of FOMC purchases on the functioning of the Treasury market and the impact of asset purchases on risk taking in financial markets."
There are also several economic reports on tap.
The S&P/Case-Shiller composite index of 20 metropolitan areas shows home prices rose 0.2% on a non-seasonally adjusted basis in December, compared with the 0.2% fall economists were expecting. Prices were up 6.8% from a year ago, the biggest year-on-year increase since July 2006.
Separate data due at 10:00 a.m. ET are expected to show sales of new, single-family homes having jumped to an annualized rate of 381,000 units in January from 369,000 the month before.
At the same time, traders will get data on consumer confidence. The Conference Board's gauge is expected to have climbed to 62 in February from 58.6 in January. Analysts will be looking to see how the payroll tax hike and high gasoline prices impacted consumers' current and future economic outlook.
Oil futures were under pressure on the back of weakness in European markets. The benchmark U.S. contract dropped 71 cents, or 0.76%, to $92.40 a barrel. Wholesale New York Harbor gasoline sold off by 1.9% to $3.00 a gallon. In metals, gold rose $7.10, or 0.45%, to $1,594 a troy ounce.
The Euro Stoxx 50 plummeted 2.5% to 2586, the English FTSE 100 sold off by 1.3% to 6273 and the German DAX tumbled 1.8% to 7637.
In Asia, the Japanese Nikkei 225 plunged 2.3% to 11399 and the Chinese Hang Seng dropped 1.3% to 22520.