Wall Street set to open higher as China stems rout

By Tanya Agrawal

REUTERS - Wall Street was set to open higher on Thursday after Beijing's efforts to halt a rout in Chinese stocks finally bore fruit and the U.S. Federal Reserve's June meeting minutes indicated that a rate hike might be pushed back.

U.S. stocks fell sharply on Wednesday as market turmoil in China, a rout in commodity prices, the Greek crisis and a major outage on the New York Stock Exchange spooked investors.

The NYSE resumed operations late in the trading day after a technical problem forced a suspension for more than three hours in the biggest outage to hit a U.S. financial market in nearly two years.

All eyes will be on the exchange at the open to see if the fix is able to withstand heavy opening trade volumes. NYSE accounted for about 13.4 percent of U.S. stocks last month.

China's securities regulator, in its most drastic step yet to arrest a selloff on Chinese stock markets, banned shareholders with large stakes in listed firms from selling for the next six months.

About 30 percent has been knocked off the value of Chinese shares since mid-June. Some investors fear that the turmoil in the Chinese market could destabilize the global financial system, making it a bigger risk than the Greek crisis.

"The Chinese market has shown a nice rebound for a day but it is important to note that many of the owners are restricted from selling their shares and half the companies have suspended trading," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.

S&P 500 e-minis were up 22.75 points, or 1.12 percent, with 266,251 contracts trade at 8:41 a.m. ET. Nasdaq 100 e-minis were up 50.5 points, or 1.16 percent, on volume of 35,429 contracts while Dow e-minis were up 176 points, or 1.01 percent, with 37,167 contracts changing hands.

Fed officials need to see more signs of a strengthening U.S. economy before raising interest rates, according to minutes of the central bank's June policy meeting, at which Greece's debt crisis was cited as a serious concern.

New applications for U.S. unemployment benefits rose last week to their highest rate since February with initial claims rising 15,000 to a seasonally adjusted 297,000 for the week that ended July 4.

European markets rose on hopes that Greece might be able to win a deal that could keep it in the euro zone.

Greek Prime Minister Alexis Tsipras has until midnight to propose spending-cut plans that will convince the euro zone to give Athens a three-year loan to rescue it from bankruptcy.

U.S. quarterly earnings season kicked off with Alcoa's quarterly profit missing expectations due to plunging primary aluminum prices.

Corporate profits are expected to have fallen 3.1 percent in the second quarter, according to Thomson Reuters estimates data.

PepsiCo shares rose 2.7 percent to $98.19 in premarket trading after the snacks and beverage maker reported better-than-expected quarterly profit and revenue.

Coty rose 3.1 percent to $32.50 after Procter & Gamble agreed to sell its beauty business to the company in a deal that values the business at $12.5 billion. P&G shares were up 1.9 percent at $82.55.

(Reporting by Tanya Agrawal; Editing by Ted Kerr and Saumyadeb Chakrabarty)