Futures signal Wall St recovery

LONDON (Reuters) - Stock futures pointed to a higher start on Wall Street on Wednesday ahead of a raft of earnings including Cisco Systems and after the market's worst fall in nearly a year on Tuesday.

The fall came after a key measure of service sector activity saw a shock drop its lowest level since October 2001. A warning from credit rating agency Fitch that it may cut the AAA-rating on MBIA Inc , the world's biggest bond insurer, also helped push the Dow Jones Industrial Average <.DJI > and the Standard & Poor's 500 <.SPX> into their biggest decline since February 27, 2007.

By 5:55 a.m. EST on Wednesday March Dow Jones , S&P and Nasdaq 100 futures were up between 0.2 and 0.4 percent, taking heart from a turnaround in European shares <.FTEU3>, which pared earlier losses to trade up 0.3 percent.

The indicative Dow Jones index <.DJII> was flat, having fallen by as much as 0.3 percent.

"Call me Harry Hindsight, but I always felt that we would never get out of jail that easily on the stock indices," said Tom Houggard, chief market strategist at City Index.

"Last night was probably just part of a normal two-day correction, as so far we are seeing some buying in Europe."

On Tuesday the Dow Jones was down 370.03 points, or 2.93 percent, at 12,265.13. The S&P was down 44.18 points, or 3.20 percent, at 1,336.64. The Nasdaq Composite Index <.IXIC> was down 73.28 points, or 3.08 percent, at 2,309.57.

Cisco, the world's top maker of routers, switches and other equipment, reports fourth quarter earnings later in the day. The company said back in November it had been hit by a dramatic drop in orders from U.S. banks squeezed by the global credit crunch.

Cisco shares were down 0.2 percent from their last close in Frankfurt at 15.89 euros .

Walt Disney shares rose by 6 percent from their last close in Frankfurt to 21.82 euros , echoing a rally in electronic composite trade in New York on Tuesday after the company reported quarterly results that topped Wall Street estimates.

Time Warner , the world's biggest media company, also reports fourth-quarter results. Its shares were down 2.8 percent from their last close in Frankfurt at 10.53 euros , having shed a similar amount on the New York Stock Exchange on Tuesday.

The most actively traded among U.S. stocks listed in Germany was Microsoft Corp's bid target Yahoo , which rose 0.3 percent from its last Frankfurt close to 19.80 euros .

Among other companies reporting earnings later on Wednesday are insurers MetLife Inc. , the largest U.S. insurer, and Prudential Financial , along with food producer Sara Lee Corp , oil refiner Sunoco Inc. and Tyco Electronics Ltd. , a maker of components for cars, aerospace and industrial uses

(Editing by Richard Hubbard)