By Chuck Mikolajczak
NEW YORK (Reuters) - Stock futures rose on Tuesday, indicating the S&P 500 may rebound from sharp losses in the prior session, but gains were muted after a Spanish bill auction met with falling demand.
* U.S. stocks fell in the prior session to put the S&P 500 near break-even for June so far, as investors saw little reason to be optimistic about a European Union summit this week.
* Spain's short-term borrowing costs nearly tripled at auction when the country sold 3.08 billion euros of its short-term debt, as the Treasury paid the highest rates to sell the paper since November.
* European shares briefly erased early gains and edged lower before rebounding, as concerns over the debt outlook for Spain weighed. The FTSEurofirst 300 index <.FTEU3> added 0.3 percent. <.EU>
* Cyprus became the latest euro zone member to ask for an aid package on Monday, adding to concerns about European leaders' ability to handle the crisis.
* Finance chiefs of the euro zone's four biggest economies will hold last-minute talks in Paris on Tuesday evening to discuss managing the crisis in the short term and proposals for closer long-term fiscal and banking integration in preparation for the summit later in the week.
* According to a document prepared for the meeting, European leaders will discuss specific steps towards a cross-border banking union, closer fiscal integration and the possibility of a debt redemption fund.
* S&P 500 futures rose 4.2 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 rose 35 points, and Nasdaq 100 futures added 10.5 points.
* Economic data on tap includes S&P Case/Shiller Home Price Index for April, 9 a.m.. Economists in a Reuters survey expect the seasonally adjusted 20-city index to rise 0.4 percent versus a 0.1 percent increase in the previous month.
* Later in the session at 10 a.m., the Conference Board releases its June consumer confidence report. Economists in a Reuters survey expect the main index to read 63.5 compared with 64.9 in May.
* Rupert Murdoch's News Corp
* Asian shares fell as investors remained skeptical that a summit of European leaders would yield any substantive measures to solve the region's protracted debt crisis, now in its third year.
(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama)
