Stocks rebound as Europe climbs

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Stocks are poised to open higher today as buyers return after yesterday's pullback.

S&P 500 futures are up about half a percent and have been sitting at their current level for the last hour. Advances in Europe range from about 0.2 percent in Germany to 1 percent in France after a strong purchasing managers report. Most Asian bourses fell in the overnight session.

The market continues to grapple with psychologically important levels in the wake of a strong rally last month. The S&P 500 has traded on either side of 1500 for almost two weeks, while the Russell 2000 has been parked at 900. The big question facing investors now is whether to buy after yesterday's decline or to wait for a steeper pullback.

The main event on today's event calendar is the Institute for Supply Management's service sector report at 10 a.m. ET. Economists anticipate a reading of 55.6, down from 56.1 the previous month.

Trading in the commodity and foreign-exchange markets is showing a pattern of risk appetite. The euro is higher across the board, while oil and silver are up by almost 1 percent. The Japanese yen is also lower, which is usually a bullish pattern. Gold and copper are posting smaller gains and agricultural products are mixed.

The Australian dollar is bucking the positive trend, dropping after the country's central bank signaled that it might not raise interest rates soon.

In company-specific news, Virgin Media is up 19 percent after confirming that it is in talks with Liberty Media regarding a potential merger. Chinese Internet giant Baidu is down about 6 percent after results beat by a small margin but growth continued to slow.

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