U.S. stock futures nudged higher Tuesday ahead of testimony from Federal Reserve Chairman Ben Bernanke, with traders waiting to see if the Fed chairman can shake markets out of the gloom that has sent stocks to nearly 12-year lows. S&P 500 futures rose 4.3 points to 749.30 and Nasdaq 100 futures added 2.5 points to 1,138.20. Dow industrial futures rose 24 points. U.S. stocks dropped Monday, as gains in the beleaguered banking sector couldn't offset weakness throughout the broader market as the U.S. government said it prefers banks to be under private ownership. Stress tests for banks will be announced on Wednesday. The Dow Jones Industrial Average dropped 250 points, the S&P 500 lost 26 points and the Nasdaq Composite fell 53 points. "Private sources of capital are cited as the first port of call for banks requiring a boost to their capital cushion. But we wonder, after the sovereign wealth funds, amongst others, took such a bath on bank stocks, how forthcoming such funds will be," said Rob Carnell, an economist at ING in London. Bernanke delivers the first of his two-day testimony in front of Congress. "I believe he will dish out more gloom today as there is no way he can put any rosy gloss upon the economic catastrophe that surrounds us," said Stephen Pope, chief global market strategist at Cantor Fitzgerald in London. "The chilling point he may dare to stress is that as companies slim down and operate from a vastly reduced cost base, labor that has been retained will actually be more productive and so recovery, when it comes, might be classified as a jobless phenomena. After all no employer is going to rapidly hire new labor until it is convinced that its products will be met by a steady demand function," he added. J.P. Morgan Chase , which late Monday cut its quarterly dividend to save $5 billion a year and keep its "fortress balance sheet" intact and said its first quarter has been "solidly profitable," said in a presentation that it expects a two-year recession, unemployment over 10% and a house price decline from peak-to-trough of 40%. J.P. Morgan shares edged up 2% in Frankfurt. Data on tap include the December house price index from S&P/Case-Shiller and consumer confidence for February. In Germany, a key business sentiment gauge slipped to a record low in February. The dollar climbed against the Japanese yen, up over 1%. Gold futures fell $4 an ounce and oil futures edged up 3 cents a barrel. American International Group also will be in focus as the insurer said it's evaluating "potential new alternatives" with the Federal Reserve Bank of New York. CNBC reported that AIG may report a $60 billion loss next week. AIG has received bids for its American Life Insurance unit from MetLife and AXA , according to a Bloomberg News report. The tech sector also will be in the spotlight as Spansion said it would cut 3,000 jobs and Micron said it would cut 2,000 jobs. Earnings are due out of H.J. Heinz and Target among others. Asian shares declined Tuesday after a plunge in the U.S. spooked investors, although some markets pared the extent of early losses in late trading. The Nikkei 225 ended 1.5% lower in Tokyo. In Europe, insurers and automakers paced a region-wide slide, with the FTSE 100 down 1.1% in late morning trade.

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