Wall St looks set to extend rally as oil rises

By Tanya Agrawal

REUTERS - Wall Street looked set to open higher on Wednesday, extending gains from Tuesday, as oil prices rose and investors got more comfortable with the prospect of an interest rate hike as early as this summer.

Oil rose towards $50 a barrel on Wednesday for the first time in seven months on expectations of shrinking supply due to well fires in Canada and other disruptions. [O/R]

Comments from policymakers in recent days have raised expectations of a rate hike in June, much sooner than previously thought.

"We've had some good economic data and investors are coming around to the fact that higher rates in a small measured dose isn't the end of the world, but is a measure of confidence in the economy," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.

Traders are now pricing in a 37.5 percent chance for a June rate hike, up from just 4 percent last week, according to CME Group's FedWatch tool.

S&P 500 e-minis were up 8.5 points, or 0.41 percent, with 195,306 contracts traded at 8:41 a.m. ET (1241 GMT). Nasdaq 100 e-minis were up 22 points, or 0.49 percent, on volume of 24,570 contracts. Dow e-minis were up 68 points, or 0.38 percent, with 24,190 contracts changing hands.

So far in 2016, the S&P 500 is up about 2 percent, while the Nasdaq is down 3 percent.

Wall Street surged more than 1 percent on Tuesday and the Nasdaq had its strongest day in three months.

Fed speakers scheduled to speak later on Wednesday include Federal Reserve Bank of Philadelphia President Patrick Harker, Minneapolis Fed Chief Neel Kashkari and Dallas Fed Chief Robert Kaplan.

Easing concerns over several major global risks helped stock markets worldwide rise robustly for a second day.

Traders say several polls show Britain will vote strongly to stay in the European Union, while Euro zone finance ministers agreed with Greece and the International Monetary Fund on a deal that will address Athens' requests for debt relief.

Shares of Computer Sciences soared 31.3 percent to $46.82 in premarket trading after Hewlett Packard Enterprise said it would spin off and merge its struggling IT services business with the company. Hewlett Packard Enterprise was up 11.7 percent at $18.15.

Tiffany fell 3.5 percent to $61.60 after reporting its steepest sales drop since the peak of the financial crisis.

Sarepta Therapeutics jumped 21.2 percent to $22.46 after the FDA delayed its decision on the company's muscle-wasting drug.

Apparel retailer Express slumped 15.4 percent to $13.60 after its results missed expectations.

(Reporting by Tanya Agrawal; Editing by Anil D'Silva)