U.S. futures edge higher ahead of trade data; Dow Jones up 0.11%

U.S. stock futures pointed to a higher open on Tuesday, as investors eyed the release of U.S. trade balance data later in the day, after a strong U.S. service sector report on Monday added to optimism over the strength of the country's economic recovery.

The Institute of Supply Management on Monday said its non-manufacturing purchasing managers' index rose to a five-month high of 55.2 in April, from a reading of 53.1 in March, compared to expectations for a rise to 54.1.Ahead of the open, the Dow 30futures pointed to a 0.11% gain,S&P 500 futures signaled a 0.14% rise, while the Nasdaq 100futures indicated a 0.26% increase.

Investors still remained cautious after conflict between the Ukrainian government and pro-Russian separatists grew more widespread over the weekend.

American International Group (NYSE:AIG) was expected to remain focus, as shares plunged 2.98% in extended trading after the insurer said late Monday that first-quarter profit dropped 27%, due to higher claims costs at the property-casualty business.

General Electric Company (NYSE:GE) was also set to be active, after French President François Hollande said the firm's $17 billion offer for Alstom (PARIS:ALSO)'s energy business is not good enough.

Elsewhere, Coca-Cola (NYSE:CCE) slipped 0.15% after hours amid reports the beverage maker plans to remove brominated vegetable oil from all its U.S. drinks by the end of this year, abandoning an ingredient that has been targeted by food activists.

After removing BVO from Gatorade last year, rival company Pepsico (NYSE:PEP) said that it too is replacing the additive in the rest of its lineup. PepsiCo shares were up 0.15% in late trade.

In the auto sector, General Motors (NYSE:GM) gained 0.40% pre-market after saying Jim Federico, an executive involved in the investigation of faulty ignition switches, has decided to retire. Federico was executive director of global vehicle integration.

Other stocks likely to be in focus included Walt Disney Company (NYSE:DIS), Whole Foods (NASDAQ:WFM), Groupon (NASDAQ:GRPN), Sunoco Logistics (SXL), American Financial Group (NYSE:AFG), First Solar (NASDAQ:FSLR) and Discovery Communications (NASDAQ:DISCA), scheduled to report quarterly results later in the day.

Across the Atlantic, European stock markets were steady. The DJ Euro Stoxx 50 dipped 0.03%, France’s CAC 40 inched 0.01% higher, Germany's DAX eased up 0.03%, while Britain's FTSE 100 fell 0.18%.

During the Asian trading session, Hong Kong's Hang Seng slipped 0.19%, while Japan’s Nikkei 225 remained closed for a national holiday.

Later in the day, the U.S. was to release data on trade.

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Forex - GBP/USD climbs to fresh 5-year highs on U.K. services PMI

The pound climbed to fresh five-year highs against the U.S. dollar on Tuesday, as the release of strong U.K. service sector data added to speculation the Bank of England could raise interest rates at the beginning of next year.

Cable was likely to find support at 1.6866, the session low and resistance at 1.7042.GBP/USD hit 1.6950 during European morning trade, the pair's highest since August 2009; the pair subsequently consolidated at 1.6949, advancing 0.48%.

Markit research group said the U.K. services purchasing managers' index rose to a four-month high of 58.7 last month, from a reading of 57.6 in March. Analysts had expected the index to remain unchanged in April.

The report came after data last week showed that manufacturing activity in the U.K. expanded at the fastest rate in five months in April, bolstering the outlook for the wider recovery.

A recent string of upbeat reports about the U.K. economy has raised expectations the BoE could raise borrowing costs ahead of other central banks.

Meanwhile, the dollar remained mildly supported after the Institute of Supply Management on Monday said its non-manufacturing purchasing managers' index rose to a five-month high of 55.2 in April, from a reading of 53.1 in March, compared to expectations for a rise to 54.1.

Sterling was also higher against the euro, with EUR/GBP slipping 0.12% to 0.8216.

In the euro zone, official data earlier showed that the number of unemployed people in Spain dropped by 111,600 in April, compared to expectationd for a decline of 49,100, after a 16,600 fall the previous month.

Separately, Markitcsaid that Spain's services PMI rose to a six-year high of 56.5 last month, from a reading of 54.0 in March. Analysts had expected the index to tick up to 54.4 in April.

Italy's services PMI swung back into expansion territory last month, rising to 51.1 from a reading of 49.5 in March, beating expectations for an uptick to 50.4.

Later in the day, the U.S. was to release data on trade.

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