By Barbara Kollmeyer, MarketWatch

MADRID (MarketWatch) — U.S. stock market futures pointed to a higher open for Wall Street on Tuesday, taking a lead from strong gains in European markets, and bolstered by hopes for action by euro-zone officials to battle the region’s sovereign debt crisis.

Futures for the Dow Jones Industrial Average DJ1Z +1.22%   rose 134 points to 11,106, while those for the S& P 500 index SP1Z +1.25%   gained 14.30 points to 1,172.70. Futures for the Nasdaq 100 index ND1Z +1.24%   added 26.50 points to 2,252.50.

Published: Tuesday, 27 Sep 2011 | 5:45 AM ET

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European shares climbed to their highest in nearly a week on Tuesday on renewed hope that European policymakers will act to contain Greece's debt problems and resolve a regional debt crisis threatening to derail the world economy.

Main European Markets

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Financials, previously hard hit because of their exposure to peripheral euro zone economies, were among the top gainers, with the STOXX Europe 600 banking index [.SX7P  133.03    5.11  (+3.99%)   ] up 3.6 percent and insurers [.SXIP  125.67    6.01  (+5.02%)   ] up 4 percent.

The indexes are still down 32 percent and 19 percent, respectively, in 2011.

" Given so much uncertainty at the moment, there is room for both pessimism and optimism. The optimists have taken the forefront on hopes that we could see European politicians getting to grips with the current situation over the coming weeks," said Keith Bowman, analyst at Hargreaves Lansdown.

" But there are still a lot of concerns. Investors remain sceptical about the success of the measures being planned to resolve the euro zone credit crisis."

Thomson Reuters Datastream data also highlighted weak investor sentiment, with the ratio of put/call open interest on the Euro STOXX 50 [.STOXX50E  2153.68    70.33  (+3.38%)   ] -- down to 1.1139 to hover near a 10-month low -- showing that investors still have little faith in the rebound.

However, the FTSEurofirst 300 [.FTEU3  Loading...      ()   ] was up 2.3 percent at 918.57 at, after hitting 921.63, the highest since September 21. It gained 1.8 percent on Monday on talk policymakers were drawing up plans to boost the size of the regional bailout fund, halve Greece's debts and recapitalise banks.

Despite the rally, the 30-day implied volatility for many European indexes rose, indicating investors' wariness of the situation.

The market awaited a policy meeting of the European Central Bank next week, with ECB officials saying on Monday they were keeping their options for a rate cut open.

There were signals the bank could start offering 12-month, limit-free loans to banks again.

Auto shares rose on hopes a solution for the euro zone crisis could bring the global economy back on track and improve demand for vehicles.

The sector index [.SXAP  253.55    11.07  (+4.57%)   ] rose 4.3 percent, while Daimler [DAIGN.DE  33.69    1.545  (+4.81%)   ] gained 5.1 percent after Credit Suisse upgraded its stock to " outperform" from " neutral" .

Key Technical Levels

The Euro STOXX 50 [.STOXX50E  2153.99    70.64  (+3.39%)   ] the euro zone's blue-chip index, was up 2.9 percent at 2,142.57 points, after climbing to its highest in more than a week earlier in the session.

Analysts said the index was likely to stay in a 2,000-2,200 range in the coming session.

If the price stays above 2,098 -- a gap on the daily candlestick chart -- on a sustained basis, the index could test 2,200.

" It is worth noting a possible double-bottom formation on the daily chart should the price recover above 2,200, which has the measuring targets at 2,343 and 2,436.

It is important to watch the next three closes," Dmytro Bondar, technical analyst at RBS, said.

Charts indicated that if the index closed below 2,000 in coming days, the move could suggest a drop to 1,810.

Equity investors face two major headwinds -- the European sovereign debt crisis which undermines the banking sector, and the threat of a global economic slowdown, with the former affecting the banking sector and the latter hurting miners.

" While the European problem has a lower probability of materialising but a massive tail risk, the potential for a premature end to this global expansionary cycle is much more probable," said Lothar Mentel, chief investment officer at Octopus Investments, which manages nearly $4 billion.

" Long-term investors should not get too stressed by mistiming concerns, given risk assets are much, much cheaper than they have been, which is what counts rather than miraculously hitting the absolute low of markets in this cycle," Mentel said.

Europe's STOXX 600 index currently trades at 8.4 times its expected earnings, below a 10-year average of 13.2, according to Datastream.

This compares with a price-to-earnings ratio of 11 for U.S. S& P 500 index.