Higher start for Russell on tap amid bank optimism

U.S. stocks are expected to jump higher on the opening, bolstered by optimism over renewed plans to mop up losing debt from bank balance sheets. Bank stocks around the world were in rally mode overnight, propelling Europe to a 2% gain, while Asia stocks were up about 0.8%. Amid the torrent of earnings reports, a few upside surprises caught trader attention, providing further support. The Dow is called 100 higher, while the Russell 2000 (NYSE:IWM) is seen opening up about 1.4%, near 461.75.

The concept of setting up a “bad bank” to absorb losing debt off bank balance sheets continues to gain momentum, sparking even more buying of bank stocks in overnight trading. Sizable upside moves were seen on many major banks, including Citigroup Inc. (NYSE:C), up about 20% in pre-market trading.

On the earnings front, SAP AG, the European-based business software maker, topped earnings forecasts and provided a lift to stocks across the pond. Here in the United States, Yahoo Inc. (Nasdaq:YHOO) and Sun Microsystems Inc. (Nasdaq:JAVA) also topped the forecast, which could help drum up some enthusiasm amid a dour overall earnings season.

Crude oil prices weren’t responding that much to the pre-market rally in stocks as energy traders fret about soft demand and huge stockpiles of product ahead of weekly inventory data this morning. The first batch of inventory numbers Tuesday afternoon showed a rise in crude oil stocks. The dollar was down about 0.8% against the euro, but that also didn’t seem to spark all that much interest in energy and commodity markets ahead of the open. Mining stocks appear to be on weak footing in pre-market . . .

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