Wall Street set for higher open, banks rise

NEW YORK (Reuters) - Wall Street was poised to open higher on Tuesday as positive developments in European financials helped bank shares and investors shrugged off a drop in home prices as already being accounted for in the markets.

The broad S&P 500 was on track to end March as the best month since April 2003 after a rapid rally that has seen stocks climb more than 16 percent off 12-year lows hit on March 9.

Prices of U.S. single-family homes in January plunged a record 19 percent from a year earlier, indicating the housing market is still in the grips of a deep recession, data showed.

A reading from the Chicago purchasing managers index and March consumer confidence data are due later in the morning.

"The housing market we know was already weak and I think people are watching more about what the G20 are talking about, or not, and will be looking at the earnings for next week," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.

"The housing aspects are more or less as the market feared."

Leaders of the world's 20 largest and developing economies meet in London on Wednesday and Thursday to try to chart a way out of the worst global crisis since the 1930s, caused by a freeze in credit after bank loans went bad.

Shares of Barclays rose in London when the bank said its trading performance "continues to be strong" after it declined to take part in a government asset protection scheme.

Fortis gained 0.8 percent after outlining its future as a viable insurance group following a 28 billion euro ($37 billion) loss in 2008 after the carve-out of its banking activities.

S&P 500 futures rose 7.60 points and were 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 climbed 80 points, and Nasdaq 100 futures added 12.25 points.

The Select Sector SPDR Financial ETF was up 2.9 percent as all the biggest U.S. banks traded higher before the bell, bouncing back from a decline on Monday after a spate of European bank rescues heightened fears over the sector.

JPMorgan Chase was up 2.8 percent at $25.55, while Bank of America gained 6 percent to $6.39.

(Editing by James Dalgleish)