US pre-open: Stocks set for positive open as oil rallies

Stocks on Wall Street looked set for a positive open on Tuesday as European indices pushed up amid stronger oil prices.

At 1245 GMT, Dow Jones Industrial Average futures were up 132 points or 0.8%, while S&P 500 futures were 17 points or 0.9% higher.

West Texas Intermediate was up 1.3% to $34.18 a barrel while Brent crude was 0.5% higher at $36.74.

“The fact that oil is trading between $34 and $26 is helping to stabilise the markets with $30 looking like a fair price in the short to medium term,” said James Hughes, chief market analyst at GKFX.

Stocks in Asia closed up despite softer-than-expected readings on China’s manufacturing as investors continued to cheer a reserve requirement ratio cut by the People’s Bank of China.

The Caixin Purchasing Managers Index fell to 49.0 in February from 49.4 the month before, missing consensus forecasts for an unchanged reading.

Meanwhile, the official manufacturing PMI from China's National Bureau of Statistics also disappointed, falling to 49.0 versus 49.4 the month before and forecasts for the same.

Eurozone manufacturing data were also out on Tuesday, with Markit’s final manufacturing PMI for the bloc printing at 51.2 in February, up a touch from the flash estimate of 51, but weaker than January’s reading of 52.3.

This marked a 12-month low, although the index has remained above the neutral 50 mark for 32 successive months.

In corporate news, Hertz Global was firmer after the car rental company said it swung to a profit in the fourth quarter.

Valeant Pharmaceuticals shares rose in pre-market trade, bouncing back from huge losses in the previous session after it confirmed it was under investigation by the Securities and Exchange Commission and withdrew its financial guidance for 2016.

On the downside, Kate Spade was under pressure after the company’s fourth quarter sales missed analysts’ expectations and it sounded a downbeat note on the full year.

SunEdison tumbled in pre-market trade after the renewable energy developer delayed the release of 2015 results, in part due to an internal inquiry over the accuracy of its financial status.

Marathon Oil was also in the red after saying it plans to sell as much as $1.23bn of stock to strengthen its balance sheet.

Intercontinental Exchange, which owns the New York Stock Exchange, will likely be in focus after confirming it is considering making a bid for London Stock Exchange to rival Deutsche Boerse’s.

Market participants will also be keeping an eye on political developments in the so-called Super Tuesday primaries, with polls pointing to big wins for Donald Trump on the Republican side and Hillary Clinton for the Democrats.

In currencies, the dollar was 0.5% lower versus the pound, 0.1% higher against the euro and 0.6% firmer than the yen.

On the macroeconomic front, data from the Institute for Supply Management at 1500 GMT is expected show US manufacturing activity was steady in last month.

Markit’s US manufacturing PMI is due at 1445 GMT while construction spending figures are at 1500 GMT.