Futures edge up; Wall Street set for best year since 1997

Wall Street

(Reuters) - U.S. stock index futures inched higher on Tuesday before housing and consumer confidence data, with the S&P 500 on track for its best year since 1997 and the Dow set to record its best performance since 1996.

Economic data expected on Tuesday's full trading session includes the S&P/Case-Shiller home price index at 9 a.m. (1400 GMT). Expectations call for a gain of 0.7 percent on a non-seasonally adjusted basis.

Later in the session at 10:00 a.m. (1500 GMT), investors will eye the Conference Board's consumer confidence data. Expectations call for the reading to increase to 76 from the 70.4 in the prior month.

"Consumer confidence, that is an interesting number because even though it's been lagging it looks like this holiday season was OK enough for retailers. But a little bit of data is always good," said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.

The S&P 500 .SPX is up 29.1 percent for the year and the Dow .DJI is up nearly 26 percent for 2013, boosted in large part by stimulus measures by the Federal Reserve. The Fed recently announced it will trim its monthly bond purchases in response to an improving economic picture.

The Nasdaq .IXIC is up 37.6 percent for the year, setting the technology-heavy index up for its best yearly performance since 2009.

"The data (this year) wasn't as strong as I would have liked to have seen it, but I guess comparatively we have seen improvement in the fundamental data that tells us the economy continues to heal. I can't wait until I'm back in the business of just looking at companies as opposed to watching the Fed," said Forrest.

S&P 500 futures rose 2.3 points and were slightly 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 16 points and Nasdaq 100 futures added 4.75 points.

For the month, the Dow is up 2.6 percent, the S&P has gained 2 percent and the Nasdaq has risen 2.3 percent.

Trading volume is once again expected to be light with U.S. markets closed Wednesday for the New Year's holiday. Many traders are away, so the thin volume could make for greater volatility.

Volume on Monday totaled 4.37 billion shares, well short of the 5.89 billion average so far this month, according to data from BATS Global Markets.

Marvell Technology Group Ltd (MRVL.O) jumped 5.7 percent to $14.54 in premarket trade after private equity firm KKR & Co LLP (KKR.N) reported a 6.8 percent stake in the chipmaker, according to a regulatory filing.

Warren Buffett's Berkshire Hathaway Inc (BRKa.N) struck a deal for around $1.4 billion of stock to buy a Phillips 66 (PSX.N) business that makes chemicals to improve the flow potential of pipelines. Phillips shares gained 1.7 percent to $76 in light premarket trade.

Hertz Global Holdings Inc (HTZ.N) gained 3.8 percent to $26.90 before the opening bell after the company said it had adopted a one-year shareholder rights plan in response to "unusual and substantial activity" it has observed in its shares.

European shares inched higher early in a shortened session on Tuesday before the New Year break, with pan-European indexes set to post their biggest annual gains since 2009. .EU

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry and Nick Zieminski)

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Futures edge up; Wall Street set for best year since 1997
Congress nearly derailed the economy — not once but several times. Lawmakers allowed a Social Security tax cut to lapse after Jan. 1, which shrank Americans' paychecks. Then they let deep federal spending cuts take effect in March because they couldn't agree on a budget. The dysfunction peaked in October: Unable to pass a 2014 budget, Congress shut down part of the government for 16 days. National parks were closed. Federal employees stayed home. The government even risked a default on its debt until, with just hours to spare, Congress reopened the government and by December forged a two-year budget deal.
The Fed and other central banks supported growth by keeping rates ultra-low. Investors, home buyers and corporations benefited. But many who depend on income from savings accounts suffered. Chairman Ben Bernanke kept the Fed's key short-term rate near zero and abandoned previous guidance about when a rate increase might eventually occur. The Fed finally decided in December to pare its bond buying program but will do so very gradually. The Bank of Japan has held rates near zero and pledged to double that country's money supply by buying bonds. And the European Central Bank cut its rate twice to 0.25 percent.

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