U.S. stock futures are looking to extend recent gains amid the latest wave of earnings and ahead of an appraisal of the economy from Federal Reserve Chief Ben Bernanke. Modest gains in Europe and Asia are also supporting stock futures. More upbeat earnings reports from a number of big-name companies on Tuesday added to investors' recent optimism. Coca-Cola Co., the world's largest beverage maker, said its earnings jumped 43 percent even as sales fell, beating analysts' estimates. Meanwhile, both chemical maker DuPont Co. and drug company Merck & Co. reported drops in their quarterly profit, but results still came in ahead of Wall Street's forecasts. Earnings reports have largely exceeded expectations so far this earnings season, fostering a renewed sense of optimism in the market and helping to drive the Dow Jones industrials back into the black for the year. Though the bar had been set fairly low for the second quarter, the results are still an encouraging sign that the recession is taking less of a toll on corporate America than it was just a few months ago. Other companies expected to report Tuesday include tech giants Yahoo Inc. and Apple Inc., as well as Starbucks Corp. Investors will also be listening intently to testimony from Bernanke, who will give his semiannual report to Congress on Tuesday and Wednesday. The market is anxious for his take on the economy, and are hungry for any clues on how the central bank plans to exit the numerous emergency support programs put in place last fall at the height of the financial crisis. Ahead of the market's open, Dow Jones industrial average futures are up 48, or 0.6 percent, to 8,853. Standard & Poor's 500 index futures are up 3.90, or 0.4 percent, to 952.90, while Nasdaq 100 index futures are up 3, or 0.2 percent, to 1,543.50. On Monday, the Dow rose for the sixth straight day, gaining 100 points to finish at its highest level since January. The benchmark Standard & Poor's 500 index, meanwhile, climbed to its highest finish since November. Stocks rose on news that CIT Group Inc. had struck a financing deal that would keep the troubled commercial lender out of bankruptcy. More solid earnings from big companies, as well as a positive reading on future economic activity also boosted stocks. Stocks have been on an upswing since last Monday, when an upgrade on Goldman Sachs Group Inc. by an influential banking analyst sparked hopes that bank earnings would show an improvement in the health of the financial sector. Since then, major indexes are up about 8 percent, eclipsing a monthlong slide in stocks that had been driven by fears the economy's recovery would not come as soon as hoped. Bond prices slipped ahead of Bernanke's testimony. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.62 percent from 3.60 percent late Monday. In an op-ed piece Tuesday in The Wall Street Journal, Bernanke wrote that the central bank "has many effective tools to tighten monetary policy when the economic outlook requires us to do so." Yet, considering current economic conditions, such moves won't likely be warranted for some time, he said. There have been concerns that the Fed's programs could spark inflation in the foreseeable future, as the large amounts of money being pumped into the system to get credit flowing again put downward pressure on the dollar. But if the Fed raises rates too soon to offset inflation, investors are worried the economy's recovery could be stifled, as still-struggling consumers are forced to pay more to borrow money. The dollar was mixed against other major currencies, while gold prices slipped. Oil prices are up 48 cents to $64.46 a barrel in electronic trading on the New York Mercantile Exchange. Overseas, Japan's Nikkei stock average jumped 2.7 percent, while Hong Kong's Hang Seng index finished trading down less than a point. In late morning trading, Britain's FTSE 100 gained 0.8 percent, Germany's DAX index was up 1.3 percent, and France's CAC-40 rose 1.2 percent.

Source