* Italian 10-yr yield at lowest in two years
* Tiffany shares slide premarket after results
* Pending home sales data on tap
* Futures up: Dow 59 pts, S&P 7.5 pts, Nasdaq 16.5 pts
By Rodrigo Campos
NEW YORK, Nov 29 (Reuters) - U.S. stocks were set to extend
gains at the open on Thursday, following a rally Wednesday, on
expectations of progress toward a fiscal agreement in Washington
that would avert a recession.
Market participants are focussed on discussions in Congress
to avoid big spending cuts and tax hikes, dubbed the "fiscal
cliff;" equities may retreat, as they did Tuesday, if the upbeat
negotiation environment in Washington deteriorates.
"There will be a deal before December 31 to avert the
economy facing disaster," said Peter Cardillo, chief market
economist at Rockwell Global Capital in New York.
"We're back on track for a year-end rally to continue," he
The yield on Italy's 10-year bonds fell to the lowest in two
years at an auction, amid relief that immediate risks over
Greece had diminished.
"The fact that the bond sales in Europe went well suggest
confidence is beginning to reenter some of the peripheral
nations and that is a good sign," Cardillo said.
The euro briefly touched the $1.30 level and is near its
highs for November, boosting commodity prices which could lift
shares of basic materials and energy companies.
S&P 500 futures rose 7.5 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 59
points, and Nasdaq 100 futures added 16.5 points.
The futures market barely reacted to data showing the U.S.
economy grew faster than first reported between July and
September, and that the number of Americans filing new claims
for unemployment benefits dropped for a second week. Data
separately showed a larger-than-expected 3.3 percent advance in
third-quarter corporate profit.
Also due for release Thursday are pending home sales for
October at 10:00 a.m. (1500 GMT) and the Federal Reserve Bank of
Kansas City November manufacturing survey at 11:00 a.m.
Kroger, the biggest U.S. supermarket operator, added
4.4 percent to $26.15 in premarket trading after reporting
Tiffany shares fell 8 percent to $58.65 in premarket
trading after the upscale jeweler reported quarterly results and
cut its full-year sales and profit forecasts.
Target shares fell 2.9 percent and Kohl's Corp
dropped 7.8 percent after the retailers posted sales for
U.S.-listed shares of BlackBerry maker Research In Motion
soared 11.7 percent to $12.40 after Goldman Sachs
upgraded the stock to "buy" from "neutral."
On Wednesday, the Dow Jones industrial average rose
106.98 points, or 0.83 percent, to 12,985.11. The S&P 500
gained 10.99 points, or 0.79 percent, to 1,409.93. The Nasdaq
Composite added 23.99 points, or 0.81 percent, to close