Stocks set for early gains

NEW YORK (CNNMoney.com) -- U.S. stocks were poised for a higher open Tuesday, as an earnings surprise from Alcoa helped boost confidence.

Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were up ahead of the opening bell.

Futures measure current index values against perceived future performance.

U.S. stocks had trouble finding direction Monday, and the blue-chip Dow ended the session higher while the broader S&P 500 finished barely changed.

After the closing bell, Dow component Alcoa kicked off the reporting period with positive results. The aluminum giant posted second-quarter earnings that topped Wall Street's estimates and issued an upbeat outlook on aluminum demand.

"We had a strong start to earnings with Alcoa yesterday so that's keeping investors more optimistic today, and we're seeing continued strength in European markets," said David Jones, chief market strategist at IG Markets. "A wave of optimism is going around the world at the moment."

But with some 21 companies in the S&P 500 due to release second-quarter results this week, investors remain on edge.

"In the short term at least, there's scope for more upside, but only if earnings continue to be good," said Jones. "And there's always a risk that more concerns about European debt will remind markets that everything is not as positive as it could be."

Economy: A report on the trade balance comes out at 8:30 a.m. ET.

Economists surveyed by Briefing.com expect the balance to have narrowed $39.5 billion in May from $40.3 billion in April.

That's followed by the Treasury budget, which is due out at 2 p.m. ET.

European debt: Moody's downgraded Portugal's government debt rating two notches to A1 with a stable outlook.

The ratings agency said it expects the country's growth prospects to remain weak and for the government's financial strength to keep deteriorating.

World markets: In Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 were all up more than 1% in morning trading.

Asian markets ended the session in negative territory. The Shanghai Composite tumbled 1.6% while the Hang Seng in Hong Kong and Japan's Nikkei edged lower.

Dollar and commodities: The dollar was up against the euro but down versus the British pound and the Japanese yen.

U.S. light crude oil for August delivery rose $1.05 to $76 a barrel.

COMEX gold's August contract gained $8.30 to $1,207 per ounce.

Bonds: Treasury prices rose, and the 10-year note yielded 3.07%. Bond prices and yields move in opposite directions.

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