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US STOCKS-Futures higher after two-day drop; earnings eyed

Chuck Mikolajczak
Tuesday, 21 Jan 2014 | 7:33 AM ET

* Travelers rises in premarket after earnings

* 70 S&P 500 companies to report earnings this week

* Lenovo resumes talks to buy IBM's low-end server unit

* Futures up: Dow 57 pts, S&P 4.25 pts, Nasdaq 15.50 pts

NEW YORK, Jan 21 (Reuters) - U.S. stock index futures rose on Tuesday, putting the S&P on track to snap a two-day losing streak as investors turned their focus to corporate earnings reports.

* Travelers Cos Inc gained 2.4 percent to $88.50 in light premarket trading after the insurance provider posted a more than three-fold rise in fourth-quarter profit.

* Other Dow components due to report earnings on Tuesday include Verizon Communications Inc, Johnson & Johnson <JNJ.N and IBM. For the week, 70 S&P 500 companies are scheduled to report.

* According to Thomson Reuters data, earnings for the fourth quarter are expected to grow 7 percent over the prior year. Of the 45 companies in the benchmark S&P index that have reported through Friday, 49 percent have topped analyst expectations, below both the long-term average of 63 percent and the average over the past four quarters of 66 percent.

* As the Federal Reserve has embarked on its plan to reduce economic stimulus, investors will closely monitor corporate profits for signs of growth. About eight companies have issued negative outlooks for every positive one, which would mark the lowest ratio on record should it continue.

* S&P 500 e-mini futures gained 4.25 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 rose 57 points and Nasdaq 100 futures added 15.5 points.

* Baker Hughes Inc, the world's third-largest oilfield services company, reported a slightly higher-than-expected quarterly profit, helped by a rise in revenue from the Middle East and Africa. Its shares edged up 0.7 percent to $54.50 in light premarket trading.

* China's Lenovo Group Ltd has resumed talks to buy IBM's low-end server unit, a source familiar with the matter said, a purchase that would bolster its efforts to diversify beyond a shrinking PC market.

* Anheuser-Busch InBev SA, the world's biggest brewer, agreed to buy back South Korea's Oriental Brewery Co Ltd for $5.8 billion including debt, returning to a large Asian market at a time of strong industry growth across the region. U.S.-listed shares of Anheuser gained 2.9 percent to $104.42 in premarket.

* Alcoa Inc advanced 2.3 percent to $11.62 before the opening bell after JP Morgan upgraded the stock to an "overweight" from a neutral" rating and boosted its price target to $15 from $9 per share.

* European shares edged higher as moves to defuse a cash squeeze in China offset a batch of disappointing corporate updates.

* Asian markets sprang higher on Tuesday as Japanese stocks rebounded and Chinese money rates eased, while the U.S. dollar edged up from a report the Federal Reserve would again trim its bond buying next week.

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