By Rodrigo Campos
NEW YORK (Reuters) - Wall Street was set to bounce back at the open on Wednesday after five days of losses on the S&P 500 that brought the benchmark index down more than 4 percent.
Tuesday marked the largest daily percentage decline on the S&P in four months, and investors will evaluate if the slide presents an opportunity for those who missed the market gains in the first three months of the year.
"After a 12 percent gain on the S&P in the first quarter, this recent pullback should provide an entry opportunity for those underweight in stocks," said Andre Bakhos, director of market analytics at Lek Securities in New York.
Sectors associated with economic growth were among the hardest hit Tuesday, making them attractive to bargain hunters. The Select Sector Financial SPDR ETF gained 1.2 percent premarket with Bank of America up 2.5 percent at $8.75.
Earnings season started on a high note Tuesday after aluminum producer and Dow component Alcoa Inc surprised Wall Street with a first-quarter profit, following a loss in last year's fourth quarter. Alcoa shares rose 5.4 percent to $9.82 in premarket trading.
No S&P 500 components are scheduled to report earnings Wednesday.
S&P 500 futures rose 10 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 76 points, and Nasdaq 100 futures added 16.5 points.
The S&P closed Tuesday below its 50-day moving average for the first time since December. If it continues to trade below that average, now just above 1,372, the level could become technical resistance and a speed bump for future gains.
Bearish analysts see more declines ahead as a result of an overextended market that has lost its footing as the euro zone debt crisis resurfaces and U.S. economic indicators soften.
Still, the economy would have to take a "fairly dramatic" turn for the Federal Reserve to launch another round of monetary stimulus, Atlanta Fed President Dennis Lockhart said.
Signals that the Fed was not keen to push for more stimulus triggered the current market pullback last week.
The U.S. Justice Department could sue Apple as early as Wednesday over alleged electronic book price-fixing, two people familiar with the matter said. Apple shares added 1.1 percent in premarket trading, recouping Tuesday's decline.
U.S.-traded shares of Nokia tumbled 16 percent after the company said it has found a software bug in its Lumia 900 smartphone, its answer to Apple's iPhone, hurting its bid to turn around its U.S. business.
Investors will keep an eye on developments in Indonesia after a massive earthquake and aftershocks struck off its coast, bringing back memories of a 2004 tsunami that killed about 230,000 people in 13 Indian Ocean countries, including Thailand, Sri Lanka and India.
A fresh tsunami warning was issued for the entire Indian Ocean as big aftershocks struck Indonesia's Aceh province. Authorities in Indonesia said there were reports of sea-levels rising off Aceh, but by less than a meter (3.3 feet).
Futures did not react to a report saying U.S. import prices rose in March by the most in nearly a year on sharply higher petroleum costs.
The Federal Reserve releases the Beige Book of regional economic conditions at 2 p.m. (1800 GMT).
On Tuesday, the Dow Jones industrial average lost 213.66 points, or 1.65 percent, to 12,715.93 at the close on Tuesday. The S&P 500 Index dropped 23.61 points, or 1.71 percent, to 1,358.59. The Nasdaq Composite tumbled 55.86 points, or 1.83 percent, to 2,991.22.
(Reporting by Rodrigo Campos; Editing by Theodore d'Affllisio)