Stocks ready to jump at open

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Fighting off the bear

One year after the collapse of Lehman Brothers, these CNNMoney.com readers are repairing their portfolios. Here's what they're doing.

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NEW YORK (CNNMoney.com) -- U.S. stocks were set to rally at Tuesday's open, lifted by optimism about the global economic recovery.

At 7 a.m. ET, S&P 500, Nasdaq-100 and Dow Jones industrial average futures were higher.

Futures measure current index values against their perceived future performance and offer an indication of how markets may open when trading begins.

U.S. stocks rallied Monday as investors bounced back from a two-week selloff and cheered an upbeat reading of the services sector. The Dow, S&P 500 and Nasdaq all gained at least 1%.

Global stock indexes also rose after Australia became the first major economy in the Group of 20 to hike rates. The Reserve Bank of Australia raised its overnight cash rate by 0.25 percentage point to 3.25%. Investors cheered as they viewed the move as a sign the financial crisis is easing.

"Stocks are not normally positive on a rate hike, but this one seems to be well received," said Neil Adams, a broker at MF Global in London.

He said the biggest factor in driving up the futures is the "cheerful optimism" exhibited by investors ahead of the earnings reporting period.

"To be honest, I'm not buying into that optimism," said Adams, who believes that last Thursday's disappointing data from weekly jobless claims and a manufacturing report demonstrate that the economy is not ready for a rally.

Earnings: Whether investors will be able to keep up the momentum will likely depend on how third-quarter earnings come in. The corporate reporting period gets underway with Alcoa (AA, Fortune 500) on Wednesday.

"If companies disappoint, we'll see a turnaround," said Adams.

World markets: In Asia, Japan's Nikkei and the Hang Seng in Hong Kong finished in positive territory. Major European indexes rallied in midday trading.

Oil and money: The dollar edged up versus the British pound, but slipped against other major international currencies, including the euro and the yen.

The price of oil rose 73 cents to $71.14 a barrel.