Stocks set to jump 2 percent at open on Europe deal

By Angela Moon

S&P futures indicated a rise of 2.5 percent at the open, with the broad index likely to break out of its recent trading range at around 1,230-1,250. Investors have been waiting on the sidelines with cash for weeks as uncertainties over Europe persisted.

S&P 500 futures rose 34.4 points and were far 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 soared 258 points, and Nasdaq 100 futures jumped 56.25 points.

European shares rose 4 percent and hit a 12-week high after the Europe deal, led by banking shares.

"There has been a lot of pessimism building up overall over the last year and it has been this European overhang. One of the things we've been saying is you need something to move people off the sidelines or from a technical perspective, you would have to see some major improvement," for a solid move on the S&P, said Todd Salamone, director of research at Schaeffer's Investment Research in Cincinnati, Ohio.

The latest data showed U.S. economic growth increased at its fastest in a year in the third quarter, expanding 2.5 percent as consumers and businesses set aside fears about the recovery and stepped up spending. Also, new U.S. claims for unemployment benefits fell modestly last week.

September U.S. pending home sales come at 10 a.m. EDT and are seen rising 0.1 percent from a fall of 1.2 percent in the previous reading.

In an early earnings report, Exxon Mobil Corp's <XOM.N> profit rose 41 percent in the third quarter, helped by gains in crude oil prices and higher refining margins. The stock was up 1.6 percent at $82.40.

Dow Chemical Co <DOW.N> narrowly missed quarterly profit expectations as cost increases dented demand in Europe and North America. The stock rose 4.1 percent at $28.

Research in Motion Ltd <RIM.TO> <RIMM.O> has been sued by BlackBerry users in the United States and Canada for massive service outages earlier this month. Its shares rose 2.2 percent to $21.17 in premarket trade.

(Reporting by Angela Moon; editing by Jeffrey Benkoe)