Stock futures pointed to a firmer start for Wall Street Tuesday, as optimism grew that Federal Reserve Chairwoman Janet Yellen will signal continued monetary support for the U.S. economy in her planned testimony to lawmakers.
Futures for the Dow Jones Industrial Average rose 68 points, or 0.4%, to 15,808, while those for the S&P 500 index gained 8 points, or 0.5%, to reach 1,802.70. Futures for the Nasdaq-100 were up 15.50 points, or 0.4%, to 3,593.
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The House Financial Services Committee will release Yellen's prepared comments on the Fed's semiannual policy outlook at 8:30 a.m. EST Tuesday, followed at 10 a.m. EST by a question-and-answer session with the panel. Yellen will testify Thursday before the Senate Banking Committee.
Ahead of that, the National Federation of Independent Business 's small-business optimism index for January is due for release at 7:30 a.m. EST. Data on wholesale inventories and job openings for December will be published at 10 a.m. EST.
Wall Street finished Monday's session with modest gains. The S&P 500 closed up 2.82 points, or 0.2%, to 1,799.84. After a recent setback and then rebound, the index is now 2.6% below its all-time high, hit on Jan. 15.
Wouter Sturkenboom, investment strategist at Russell Investment, which has $256 billion under management, said he's surprised about how strong markets have been over the last few days. "It seems people have gotten a second wind and are getting a bit more optimistic. Yellen is driving the story," he said.
Sturkenboom said investors anticipate a "dovish Yellen" even though they don't predict a halt to the Fed's pullback on bond-buying. "Tapering is expected to continue, but they expect her to at least talk about the need for continued monetary support for the U.S. economy," he said.
He said his firm has put a bit of risk back on, adding to Japanese and European stock positions. However, it remains neutral on the U.S., with Sturkenboom expecting a correction to hit at some point this year. "We definitely haven't reached levels you could say are a buying opportunity. If we collate that with the fact that we've seen a year of validation--earnings and economic growth could validate the rally of 2013--we're bound to run into disappointments sooner or later," he said.
On the corporate calendar for Tuesday, CVS Caremark Corp. (CVS) and Sprint Corp. (S) are expected to report ahead of the opening bell.
Rackspace Hosting Inc. (RAX) could come under premarket pressure after sinking 14% in Monday's after-hours session. The company reported a 30% drop in profit as higher costs offset growth in revenue. It also said Chief Executive Lanham Napier would retire.
In other markets, European stocks climbed, while shares in Hong Kong rallied and Tokyo was closed for a holiday. Gold pushed a win streak toward a fifth session, while oil rose and the dollar pulled back.