* Bush says legislative process on bailout not over
* Investors eyeing resuscitation of bailout plan
* Consumer confidence, Chicago PMI also in focus
* US home price drop hits records in July - S&P
(Recasts first paragraph, adds comments from Bush, updates
prices)
By Ellis Mnyandu
NEW YORK, Sept 30 (Reuters) - U.S. stocks were poised to
rise at the open on Tuesday, clawing back from Wall Street's
worst slide in more than 20 years, as investors bet that
Washington will work to revive a plan to stabilize the U.S.
financial system.
The House of Representatives rejected the proposed $700
billion rescue plan on Monday, but investors held out hope that
leaders in Washington might work around any disagreements.
Still, signs of mounting strains in the credit markets
fueled caution after overnight dollar interbank lending rates
hit their highest in at least 7-1/2 years, suggesting banks
continued to horde cash amid a lack of confidence. For details,
see []
U.S. President George W. Bush said the legislative process
on the bailout plan was not over and the economy depended on
"decisive action" from the government. For details, see
[]
The surprise defeat of the plan rattled markets around the
globe, with Asian stocks following Wall Street's Monday slide
overnight. European shares gave up gains on Tuesday after
Bush's remarks and awaited news on the bailout plan.
"There's an overarching belief that at some point this
week, whether it's Wednesday or Thursday, we'll get something
passed by the House," said Arthur Hogan, chief market analyst
at Jefferies & Co in Boston.
"At the same time, the market is coming to the realization
that this rescue package, in whatever form it comes out, is not
going to cure everything. It's not going to cure a slower
economy or force banks to lend to each other. We're going to
fix one problem but we're still in a slow economy."
S&P 500 futures <SPc1> rose 21.40 points and were 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 <DJc1> climbed
124 points and Nasdaq 100 <NDc1> futures added 18 points.
According to Thomson Reuters weekly 14-day relative
strength chart data, the broader market -- as measured by the
S&P 500 <.SPX> -- will start Tuesday's trading at its most
oversold level since July 2002, right before the start of the
last bull market.
Hogan said he expected gains to be tentative until there
was clarity from Washington. He added bargain-hunting was
likely to underpin the market on Tuesday. Trading may be light
with many market participants away from their offices for the
Jewish New Year holiday on Tuesday and Wednesday.
In economic news, the S&P/Case-Shiller Home Price Index
showed further deterioration in housing, with prices of
single-family homes plunging a record 16.3 percent in July.
[]
September's Chicago PMI, a measure of manufacturing
activity in the U.S. Midwest, is due at 9:45 a.m. (1345 GMT).
The Conference Board's reading on consumer confidence in
September is due at 10 a.m. (1400 GMT).
(Editing by Kenneth Barry)
