Wall St. eyeing bounce after sell-off

NEW YORK (Reuters) - Stock index futures pointed to a bounce at the opening of Wall Street on Tuesday as investors speculated that global central banks might mount a coordinated response to calm jittery markets and thaw the credit freeze.

Investors looked to snap up beaten down shares in desperate sectors, including technology and energy, a day after recession and credit worries sent global stocks plunging and the Dow Jones industrial average sunk below 10,000 for the first time in 4 years.

A small rise in European stocks also looked set to add to the positive tone despite lingering worry about the stability of major banks.

Even so, there was likely to be caution and trading could be volatile due to signs that credit markets effectively remained gridlocked.

Again, the interbank overnight and three-month costs to borrow dollars shot up, indicating the continued lack of confidence and that banks were hoarding cash.

"We've gotten oversold," said Arthur Hogan, chief market analyst Jefferies & Co in Boston. "At some point, with the magnitude of the news we've got, you have to say the worst case scenario has been priced in."

On the issue of a likely response by global central bankers, he said: "If a coordinated effort by the central banks happens, that would be fine. But I think that's idle speculation right now."

S&P 500 futures rose 9.20 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 33 points and Nasdaq 100 futures gained 15.50 points.

Investors will hear from Federal Reserve Chairman Ben Bernanke, who speaks to a business group at 1:15 p.m..

In Monday's trading U.S. stocks cut almost half of their losses in the final hour of the session as traders speculated the sell-off may trigger a coordinated global response to thaw credit markets. Much of the speculation centered around the possibility of rate cuts.

Bank of America , a major U.S. bank, looked set to be among the drags to any recovery, a day after it unexpectedly posted results that showed a slide in quarterly profit and slashed its dividend. Bank of America shares were down 9 percent at $29.30 before the bell.

But shares of Chevron inched up nearly 1 percent to $77.50 as U.S. crude for November delivery gained $3.15 to $90.98 a barrel.

A source familiar with discussions between the U.S. Treasury and the Fed said officials were considering setting up a lending program aimed at thawing the $1.6 trillion U.S. commercial paper market. The market is an integral for the smooth operation of many U.S. businesses that use the marketplace to fund operations on a short-term basis.

Among steps under consideration would be funding a special purpose vehicle as opposed to outright purchase of commercial paper, the source said.

(Editing by Kenneth Barry)