Index futures edge higher ahead of confidence data

NEW YORK (Reuters) - Stock index futures rose on Tuesday as traders looked ahead to key economic data in a new test for the improving recovery theory that has driven up stocks this month.

Signs the economy is on firmer footing have boosted equities about 9 percent in September. Fresh indicators for the economy will be the S&P/Case-Shiller Home Price Index and the Conference Board's monthly consumer confidence data Tuesday morning.

Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey, said consumer confidence has been a reliable indicator of market direction and could determine Wall Street's course through the end of the quarter.

"It's massively important this morning," he said. "If consumer confidence does not give the market a reason to trade higher we will fall off."

S&P 500 futures rose 2 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 gained 33 points, and Nasdaq 100 futures added 8.25 points.

Walgreen Co , the biggest U.S. drug store chain, reported higher-than-expected quarterly earnings, helped by strong prescription drug sales, sending its shares up 7.5 percent to $32.62 in premarket trading.

Shares in Pulte Homes Inc rose 2.6 percent to $8.95 after Goldman Sachs removed the stock from its 'Americas Sell List' and upgraded it to "neutral" from "sell." Analysts pointed to share and debt purchases, cost cutting and bearish sentiment toward the stock.

The S&P/Case-Shiller Home Price Index for July is due at 9 a.m. EDT (13:00 GMT) and is expected to show a decline of 0.1 percent versus a gain of 0.3 percent in June. The Conference Board's consumer confidence report is expected an hour later and is seen falling to 52.5 from 53.5, according to a Reuters poll.

Continuing the spurt of recent M&A activity, Endo Pharmaceuticals Holdings Inc will buy private generics company Qualitest Pharmaceuticals for about $1.2 billion to expand its portfolio of pain drugs, marking its second deal in as many months.

The S&P 500 blew past a strong technical resistance level at 1,130 last week. Resistance is seen at about 1,173. The index closed at 1,142.16 on Monday.

Options investors seemed to be more concerned about current market conditions. Larry McMillan, president of McMillan Analysis Corp, said extreme overbought conditions were seen in the "term structure" of VIX futures.

(Reporting by Edward Krudy; editing by Jeffrey Benkoe)

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