Stock futures up on optimism over Greek vote

NEW YORK (Reuters) - Stock index futures rose on Tuesday as expectations grew that a solution will be found for Greece to avoid a default and a short-term contagion risk to other euro zone countries could be contained.

Euro zone finance ministers said the Greek government had until July 3 to approve new steps to get the next installment of 110 billion euros in European Union andInternational Monetary Fund aid.

The market expected a vote of confidence in Greek Prime Minister George Papandreounew cabinet to pass on Tuesday -- the first of three hurdles the government must clear to avert the euro zone's first sovereign debt default. The vote is due around 5 p.m. EDT.

"There is hope that at the end some positive decision will come out of EU, IMF ... A lot of worries in the market for the most part have been discounted and any good news coming out of Greece will be a relief to investors' concern, and the market will see some technical balance in the next couple of days," said Peter Cardillo, chief market economist at Avalon Partners in New York.

S&P 500 futures gained 6.9 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures advanced 62 points, and Nasdaq 100 futures rose 12.25 points.

The Federal Reserve Open Market Committee (FOMC) begins a two-day meeting later Tuesday. The Fed is expected to cut its growth forecast for 2011, but the central bank and its chairman, Ben Bernanke, will likely continue to argue the slowdown is temporary and the economy will pick in the second half of the year.

U.S. home sales data for May is due at 10 a.m. EDT. Analysts in a Reuters survey expected sales to drop to about 4.8 million, compared with 5.05 million the month before.

In company news, Walgreen Co <WAG.N> shares fell 5 percent to $42.90 in premarket trade after the drugstore chain said efforts to renew an agreement with pharmacy benefits manager Express Scripts Inc <ESRX.O> failed. It also reported higher quarterly earnings.

Adobe Systems Inc <ADBE.O> is set to release results after the bell, with analysts looking for a 20 percent increase in earnings per share from 44 cents a year ago.

Research In Motion Ltd <RIM.TO><RIMM.O> lost a second marketing executive, and its shares dropped 7 percent Monday in the latest bit bad news that has cut theBlackBerry maker's market value in half this year. The stock rose 0.7 percent at $26.06 in premarket trade.

U.S. lawmakers working to rein in the country's rising debt said they will have to make substantial progress this week to ensure the country retains its top-notch credit rating.

Rating agency Fitch said it would place the credit rating of the United States on watch negative if the debt ceiling is not raised by August 2, when the government has warned it may not be able to borrow more.

On Monday, stocks erased early losses as the S&P 500 dipped toward 1,259.78, its 200-day moving average, which is often viewed as a pivotal point in determining market direction.

(Reporting by Angela Moon; editing by Jeffrey Benkoe)