* China cuts rare earth export quotas; Molycorp climbs
* Futures up: Dow 18 pts, S&P 2.4 pts, Nasdaq 6.5 pts (Adds BJ's, updates prices)
By Chuck Mikolajczak
NEW YORK, Dec 29 (Reuters) - U.S. stocks were set for a modestly higher open on Wednesday, indicating stocks were on track to extend a December rally as investors remained bullish about the prospects of a global economic rebound in 2011.
The S&P 500 has risen 6.6 percent in December, pushing the benchmark index above levels reached on Sept. 12, 2008, the last trading day before Lehman Brothers collapsed, as improving economic data and political events have encouraged risk-taking.
"With the passage of the extension of the tax cuts for two years, we now have a pretty firm basis on what tax policy will be for the next two years. The Republicans (who will take)charge will restrain some of the activism of the administration with regards to new initiatives," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
"All of that leads me to think we are in for a fairly stable environment -- at least for the next year or so."
The December rally has been fueled in large part by gains in financial shares, indicating investor confidence in economic prospects, with the KBW Bank index up 17.3 percent for the month.
"Performance of the financials is allowing investors to look ahead with greater confidence than has not been seen in quite awhile. Compared to its global peers, the U.S. market is gaining fans," said Andre Bakhos, director of market analytics at Lek Securities in New York.
S&P 500 futures rose 2.4 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 gained 18 points, and Nasdaq 100 futures added 6.5 points.
BJ's Wholesale Club jumped 6.1 percent to $47.20 after the New York Post reported U.S. buyout firm Leonard Green & Partners remained keen to acquire the warehouse club operator and may launch a hostile bid if an auction is not initiated in the coming weeks, citing sources.
A judge has ruled that SAP AG must pay Oracle Corp prejudgment interest on a recent $1.3 billion copyright infringement verdict, but not using Oracle's formula.
Shares of rare earths companies soared Wednesday after China cut export quotas, threatening to reduce already tight global supplies and risking action from the United States at the World Trade Organization. Molycorp Inc, which owns a rare-earth mine in Mountain Pass, California, rose 4.5 percent to $48.25 in premarket trade.
Private equity company Blackstone Group LP has joined the bidding for Australian shopping-center owner Centro Properties Group's asset portfolio, the Wall Street Journal reported.
Starbucks Corp denied claims that Kraft Foods Inc performed "exceptionally well" under an agreement to sell Starbucks' packaged coffee, court documents showed.. Kraft shares slipped 0.6 percent to $31.66 in premarket.