Wall Street futures up; eyes on banks and spending data : US Business

FRANKFURT (Reuters) - Stock index futures rose before the start of Wall Street trading on Friday, signaling a rebound from the previous session's losses, with banks likely to remain in focus and eyes also on economic data.

At 6:20 a.m. EDT, Dow Jones futures were up 0.6 percent, S&P 500 futures traded 0.7 percent higher and Nasdaq futures also rose 0.7 percent.

The indicative Dow Jones index <.DJII>, which tracks how the Dow stocks trade in Frankfurt, was up 0.5 percent.

Shares in investment bank Lehman Brothers were up 4.3 percent in Frankfurt after Citigroup upgraded its recommendation on the stock to "buy" from "hold."

"We see 70 percent upside in Lehman shares," Citigroup said in a note. "We see the current valuation as an extremely attractive entry point," it said, adding: "Lehman has ample liquidity to run its business."

On Thursday, Lehman shares fell 8.9 percent on speculation it might suffer a fate similar to the near collapse of Bear Stearns . Lehman called the rumors "totally unfounded."

The Frankfurt-listed shares of Lehman rivals such as Morgan Stanley and Goldman Sachs also rose.

But Bear Stearns shares fell 4.6 percent in Frankfurt , having dropped 5.2 percent after Wall Street's closing bell on Thursday after a filing showed its chairman and his wife had sold shares.

BELOW TREND

Speaking in South Korea on Friday, Boston Fed President Eric Rosengren said the woes of U.S. banks could mount as the economy slows.

Citigroup said in an equity portfolio strategy note: "The U.S. recession is likely to be deeper than previously expected, with growth staying below trend until late 2009."

It now estimates U.S. growth of "a little below 1 percent year over year in both 2008 and 2009."

Friday's U.S. macro economic diary has personal income and spending data for February at 1230 GMT. Economists polled by Reuters expect a rise of 0.3 percent in income and a 0.1 percent increase in spending.

At 1800 GMT, the Federal Reserve releases its annual revisions to industrial production and capacity utilization.

Two S&P 500 companies are scheduled to report quarterly results: home builder KB Home and filtration systems maker Pall Corp .

Eyes could also be on Apollo Group Inc , whose shares fell 8.4 percent after the closing bell in the wake of the education company's sharply lower quarterly net results.

On Thursday, U.S. stocks fell for the second day in a row. The Dow <.DJI> lost almost 1 percent to 12,302.46 points, the S&P 500 <.SPX> dropped 1.2 percent to 1,325.76 and the Nasdaq <.IXIC> slumped 1.9 percent to 2,280.83.

UniCredit chartists put technical support for the S&P 500 at 1,265 points and resistance at 1,360 points.

Commerzbank saw it as decisive that the S&P would not drop back for any length of time below its January low of 1,270 points. "We would take this as a clear sign that the equity markets had a good chance of making a strong recovery in the second half of the year," the German bank said in a note.

(Reporting by Peter Starck; Editing by David Holmes)

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