Mood brightens on Wall Street

NEW YORK (CNNMoney.com) -- Stock futures climbed early Tuesday, lifted by expectations that the Federal Reserve will aggressively cut rates at its regularly scheduled meeting today and bolstered by better-than-expected earnings from Goldman Sachs and Lehman Brothers.

Less than half an hour before the start of trading, Nasdaq and S&P futures were higher, suggesting a positive open for stocks.

The most anticipated event of day comes at 2:15 p.m. ET, when the Fed issues its policy statement. The Fed is expected to cut the target for the fed funds rate, a key overnight consumer lending rate, by as much as a full percentage point when it meets. The rate currently stands at 3%.

Financial stocks are likely to get a shot in the arm after Goldman Sachs (GS, Fortune 500) and Lehman Brothers (LEH, Fortune 500) both managed to beat estimates for dismal expectations with their earnings reports. Goldman's shares jumped more than 6% in pre-market trading, while Lehman surged more than 13%.

Goldman reported net revenues of $8.34 billion and net earnings of $1.51 billion, or $3.23 per share, for the first quarter. This easily cleared analysts' consensus expectations of $7.5 billion in revenue and $1.2 billion in net income, or $2.58 per share.

Lehman said net income plunged 57% to $489 million, or 81 cents per share, for the first quarter. Revenue fell to $3.5 billion from $5.05 billion the prior year. Analysts had projected a profit decline to 72 cents a share and revenue of $3.35 billion.

Lehman shares dove 19% Monday on speculation that the investment bank will follow in the footsteps of Bear Stearns and collapse amid the credit turmoil. Bear Stearns (BSC, Fortune 500) reached a deal Sunday to be sold to JPMorgan Chase (JPM, Fortune 500) for a fire-sale price of $2 a share, or $230 million.

On the economic front, a report on housing starts showed an increase in February from the prior month. Housing starts rose to a 1.065 million unit rate, beating expectations of a 995,000 unit rate. Building permits declined to a 978,000 unit pace, missing expectations of 1.02 million, and down from a 1.06 million unit pace in February.

The Producer Price Index, a measure of the price of wholesale goods, matched expectations with a rise of 0.3% in February. The index jumped 1% in January. Core PPI, which excludes food and energy, rose 0.5% in February, exceeding the expected gain of 0.2%, but down from January's rise of 0.4%.

In global trade, overseas stocks rebounded from the past session's sharp fall. Asian stocks finished mostly higher, and European shares rallied in afternoon trading.