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US STOCKS-Futures suggest higher open, though oil weighs

Published 03/01/2011, 08:57 AM
Updated 03/01/2011, 09:00 AM
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* Bernanke expected to be cautious on economy in testimony

* Crude rises as U.S. moves warships closer to Libya

* ISM manufacturing, construction spending data on tap

* Futures up: Dow 33 pts, S&P 4.1 pts, Nasdaq 6.75 pts (Updates prices)

By Ryan Vlastelica

NEW YORK, March 1 (Reuters) - U.S. stock index futures pointed to a positive open on Tuesday but gains could be capped by a jump in oil prices as investors awaited testimony from U.S. Federal Reserve Chairman Ben Bernanke.

April U.S. crude futures added 0.8 percent to $97.78 per barrel while Brent rose near $113 per barrel on continued concerns about supply disruptions amid unrest in Libya.

The S&P had its weakest performance since November last week on concerns that high oil prices would stifle economic activity.

"If gas prices go higher that will put a damper on things," said Douglas Lane, president of the New York-based Douglas C. Lane & Associates, which has about $2.2 billion in assets under management.

"The market has been on a big upswing and there will be a correction at some point. Maybe the oil crisis will be a reason for that."

Bernanke is not expected to cut short the Fed's bond buying program. With much of the market's steep gains over the past several months coming since the Fed announced its $600 billion stimulus program, investors have been concerned about the impact of ending it early.

In his testimony to the U.S. Senate Banking Committee, Bernanke is expected to remain cautious about the economy despite recent data pointing to improvement.

S&P 500 futures rose 4.1 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 added 33 points and Nasdaq 100 futures rose 6.75 points.

February ISM manufacturing data will be released at 10 a.m. EST, along with January construction spending data. The ISM number is seen rising to 61 from 60.8 in the previous month, while construction spending is expected to show a narrower rate of decline than in the previous month.

In the latest overseas economic data, Chinese manufacturing growth slowed to a six-month low in February, suggesting moves to combat inflation may be working.

The data was "reassuring in the sense that it will probably take some pressure of food and energy inflation," said Oliver Pursche, president at Gary Goldberg Financial Services in Suffern, New York.

Fresh Del Monte Produce Inc reported adjusted fourth-quarter earnings and revenue that missed expectations, AutoZone Inc also reported results early Tuesday. and

Stocks rose for a second straight session Monday after billionaire investor Warren Buffett, chairman of Berkshire Hathaway Inc, said the conglomerate needed to make "major acquisitions", a sign stocks may be cheap.

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