US STOCKS-Wall St to open up ahead of 'cliff' talks restart

Reuters

* S&P/Case Shiller data tops expectations

* Obama heads back to Washington after vacation

* Futures up: Dow 23 pts, S&P 1.9 pts, Nasdaq 3.25 pts

NEW YORK, Dec 26 (Reuters) - U.S. stock index futures

pointed to a slightly higher open on Wednesday, indicating the

S&P 500 may stem its worst two-day drop since mid-November,

ahead of the resumption of "fiscal cliff" negotiations.

President Barack Obama, after vacationing in Hawaii, is due

back in Washington early Thursday for a final effort to

negotiate a deal with Congress to avert or at least postpone the

cliff, a series of tax increases and government spending cuts

set to begin next week.

"This is what we've come to - the President might get on a

plane today and this is what the markets might react to," said

Kim Forrest, senior equity research analyst at Fort Pitt Capital

Group in Pittsburgh.

"It's all about the fiscal cliff."

A Republican plan that failed to gain traction last week

triggered the recent decline in the S&P 500, highlighting

market sensitivity to headlines centered around the talks.

Data showed U.S. single-family home prices rose in October,

reinforcing the view the domestic real estate market is

improving, as the S&P/Case Shiller composite index of 20

metropolitan areas gained 0.7 percent in October on a seasonally

adjusted basis.

S&P 500 futures rose 1.9 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

23 points, and Nasdaq 100 futures climbed 3.25 points.

The benchmark S&P index is up 13.4 percent for the year, and

has recouped nearly all of the losses suffered in the wake of

the U.S. elections, when the fiscal cliff concerns moved to the

forefront of investors' focus.

Retailers will be in focus as data on the holiday shopping

season begins to come in.

"The broad brush was that Christmas wasn't all that merry

for retailers and you have to ask what those margins look like

if the top line didn't meet their expectations," said Forrest.

China's Sinopec Group and ConocoPhillips

will research potentially vast reserves of shale gas in

southwestern China over the next two years, state news agency

Xinhua reported.

An outage at one of Amazon.com Inc's web service

centers hit users of Netflix Inc's streaming video

service on Christmas Eve and was not fully resolved until

Christmas Day, a spokesman for the movie rental company said on

Tuesday.

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