Wall Street expected to open higher, after Italy indicates to reducing budget

Wall Street was set to open higher on Wednesday, buoyed by a rebound in European markets after Italy indicated that it was open to reducing budget deficits and debt in the coming years.

Concerns over Italy's budget deficits and high debt levels have pressured global stock markets since the country's ruling coalition last week tripled the previous government's budget deficit target.

"Today, so far, has been better-than-expected performance out of Europe and that's got futures up," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee, Wisconsin.

Antonelli said while Italy was not a gigantic catalyst for the market, but a loss out of Europe has been setting the tone for the U.S. markets.

U.S. bank stocks rose, with Citigroup, JPMorgan Chase, Bank of America up between 0.6 per cent and 0.8 per cent, mirroring a recovery in their Italian peers.

Among top gainers on the S&P 500 stocks trading premarket was General Motors, which jumped 5.3 per cent after Honda Motor said it would invest $2 billion over 12 years in the U.S. carmaker's Cruise self-driving unit.

Shares of J.C. Penney surged 10.9 per cent after the company named retail veteran Jill Soltau as its new chief executive.

At 8:40 a.m. ET, Dow e-minis were up 99 points, or 0.37 per cent. S&P 500 e-minis was up 10.5 points, or 0.36 per cent and Nasdaq 100 e-minis were up 31.75 points, or 0.41 per cent.

Lennar was up 0.5 per cent, paring some early gains, after the U.S. homebuilder reported a higher-than-expected quarterly profit, benefiting from a robust housing market.

Other homebuilders also rose. D.R. Horton, PulteGroup, and Toll Brothers gained between 1.2 per cent and 1.8 per cent in light volumes.

Michael Kors rose 2.6 per cent after Citi upgraded the company's shares, citing a potential upside from its recent purchase of Italian fashion house Versace.

Intel looked set for a second straight day of gains, up 1.3 per cent. The chipmaker closed 3.6 per cent higher on Tuesday and was among the biggest drivers that helped the blue-chip Dow Jones Industrial Average seal a record closing high.

A number of Federal Reserve officials are scheduled to speak on topics ranging from the outlook of the U.S. economy to the labour market on Wednesday.

ADP National Employment Report showed U.S. economy added 230,000 private sector jobs in September, highest since February and above the 185,000 increase expected by Reuters consensus forecast.

The ISM data due at 10:00 a.m. ET is expected to show its non-manufacturing activity index fell 0.5 points to 58.0 in September.

(With inputs from agencies.)