* Coach advances dividend pay date to Dec. 27
* Cerberus may join Virtu bid for Knight Capital -WSJ
* Futures up: Dow 10 pts, S&P 1.9 pts, Nasdaq 3 pts
By Rodrigo Campos
NEW YORK, Dec 4 (Reuters) - U.S. stock index futures edged
up in low volume on Tuesday as the market remains hostage to
negotiations in Washington on how to avert a "fiscal cliff" that
could push the U.S. economy into recession.
Republicans in Congress proposed steep spending cuts to
bring down the budget deficit on Monday but gave no ground on
President Barack Obama's call to raise taxes on the wealthiest
Americans, and the proposal was dismissed by the White House.
Headlines about the negotiations have dominated market
action, with many investors expecting the two sides to come up
with a deal before the year-end deadline that could trigger a
rally in equities.
"Support (for the market) is based on a belief that
Washington will come to some agreement before we go over the
fiscal cliff," said Art Hogan, managing director of Lazard
Capital Markets in New York.
He said that while the politicians are more concerned with
showing a hard line in public, "their staffers are looking for
middle ground. On the first show of flexibility from either side
we'll get a relief rally."
Obama will meet with U.S. governors at the White House on
Tuesday to talk about the fiscal cliff, a package of tax
increases and federal spending cuts that are due to begin Jan.
Coach became the latest company to advance the date
of its next dividend payment. Expectations of higher taxes on
dividends kicking in next year have pushed many companies to pay
special dividends this year or advance their next pay-back to
S&P 500 futures rose 1.9 points and were slightly
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
10 points, and Nasdaq 100 futures added 3 points.
A light data calendar for Tuesday includes the Institute for
Supply Management-New York release of its November index of
regional business activity at 9:45 a.m. (1445 GMT).
Toll Brothers shares rose 5.2 percent in premarket
trading after the largest U.S. luxury homebuilder reported a
higher quarterly profit and said new orders rose sharply.
MetroPCS Communications shares dropped 5.2 percent
after Sprint Nextel appeared unlikely to make a
counter-offer for the wireless service provider.
Cerberus Capital Management is in talks to join Virtu
Financial's bid for U.S. brokerage Knight Capital Group,
the Wall Street Journal reported, citing people familiar with
the discussions. Knight became a takeover target after a trading
glitch left it nearly bankrupt earlier his year.
Shares of Pep Boys-Manny Moe and Jack were down 6.4
percent in light premarket trading a day after the release of
the auto parts retailer's results.
U.S. stocks fell on Monday as disappointing numbers on U.S.
factory activity overshadowed optimism about China's economic