The US bourse is set to open higher as European leaders get ready to meet.

New York - US stock index futures advanced on Tuesday, a day after the S&P 500 suffered its biggest drop in two months, as investors prepared for retail sales data and the first round of earnings from major banks.

* The benchmark S&P index fell 1.3 percent on Monday, its worst decline November 7, as investors exercised caution amid mounting negative corporate outlooks.

Almost 10 out of every 11 earnings pre-announcements for the current earnings season from S&P 500 companies have lowered estimates, according to Thomson Reuters data, which would be the lowest on record if it continues.

* JPMorgan Chase & Co was little changed in choppy premarket trading after posting quarterly earnings.

Wells Fargo & Co results are due later on Tuesday and will also be monitored closely by investors.

* Later in the week, Bank of America Corp, Citigroup Inc, Goldman Sachs and Morgan Stanley are among the financial companies scheduled to post results.

* S&P 500 futures rose 2.5 points and above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures gained 16 points and Nasdaq 100 futures added 3.25 points.

* After the closing bell on Monday, Yum Brands Inc said December sales at established restaurants in China, its top market, rose a smaller-than-expected 2 percent after weakness at its Pizza Hut Casual Dining chain weighed on a recovery at KFC.

* Merger activity continues to be lively.

Google Inc gained 1 percent in light premarket trade after the world's largest online search engine announced late Monday a $3.2 billion deal to buy smart thermostat and smoke alarm maker Nest Labs Inc.

* Charter Communications Inc on Monday formally offered to acquire larger rival Time Warner Cable for $37.3 billion, sparking what is likely to be a contentious battle to control the No. 2 US cable operator.

* Microsoft Corp shares fell 0.8 percent to $34.69 in premarket trade after Citigroup cut the stock to “neutral” from a “buy” rating.

* Thompson Creek Metals Company Inc jumped 23.3 percent to $2.70 before the opening bell after Bank of America Merrill Lynch boosted its rating on the stock to “buy.”

* European shares fell, taking their cue from Wall Street's steep selloff.

* Asian shares came under pressure, with Japanese stocks tumbling more than 3 percent as the yen hit a four-week high against the dollar after last week's surprisingly weak jobs report raised concerns about US growth. - Reuters