Wall Street set to rebound after selloff; Yellen testimony due

NEW YORK (Reuters) - U.S. stocks were set to bounce at the open on Wednesday, on the heels of the biggest drop in the S&P 500 since mid-April, as earnings season winds down and ahead of congressional testimony from Federal Reserve Chair Janet Yellen.

Developments in Ukraine helped sentiment, as Russian President Vladimir Putin said Wednesday he was ready to discuss a way out of the crisis with the head of the Organization for Security and Co-operation in Europe (OSCE).

Testimony from Fed Chair Yellen to the Joint Economic Committee, scheduled for 10:00 a.m. (1400 GMT), will be closely monitored. While Yellen is largely expected to maintain a dovish policy stance, investors will look for clues on how soon interest rates will be raised, with many expecting hikes beginning in 2015.

U.S. stocks fell on Tuesday, closing at session lows as the S&P 500 <.SPX> suffered its biggest percentage decline since April 11. AIG dragged on financial shares after disappointing earnings and a slide in Twitter hurt other names in the technology and internet space.

Over 20 S&P 500 companies are scheduled to report earnings on Wednesday. Whole Foods Market Inc tumbled 18 percent to $39.31 in premarket trading after the organic grocer posted second-quarter results and cut its 2014 outlook on Tuesday.

S&P 500 e-mini futures rose 4 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 e-mini futures gained 47 points and Nasdaq 100 e-mini futures added 9.5 points.

According to Thomson Reuters data through Tuesday morning, of 397 companies in the S&P 500 that have reported earnings, 67.5 percent beat expectations, above the 63 percent average since 1994 and 66 percent beat rate for the past four quarters.

Profits are expected to rise 4.6 percent this quarter, down from 6.5 percent growth estimated at the start of the year, but above the low of 0.6 percent in mid-April, according to Thomson Reuters data.

U.S. nonfarm productivity fell at its fastest pace in a year in the first quarter due to severe weather, leading to the largest gain in unit labor costs in more than a year. Productivity fell at a 1.7 percent annual rate in the quarter, the Labor Department said.

Mondelez International Inc jumped 9.5 percent to $38.70 before the opening bell after the company posted first-quarter earnings and said it reached a deal with Dutch coffee and tea company D.E Master Blenders 1753 BV to combine coffee businesses.

Electronic Arts surged 16.9 percent in premarket trading after the video game publisher posted quarterly profit and revenue that beat expectations late Tuesday.

(Reporting by Chuck Mikolajczak; Editing by Bernadette Baum)

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