Stock Futures Up As Spain Works On Reforms; Apple Eyed

NEW YORK (Reuters) - Stock index futures advanced on Friday as Spain worked on reform measures in anticipation of a bailout package and as Apple debuted its latest iPhone worldwide.

Spain is considering freezing pensions and speeding up a planned rise in the retirement age as it races to cut spending and meet conditions of an expected international sovereign aid package, Sources with knowledge of the matter said.

After gaining about 6 percent since the start of August, largely on expectations for new economic stimulus measures by world central banks, the S&P 500 <.spx> has seen muted action this week. The index has been unable to muster a daily move of more than 0.4 percent in either direction in the wake of the U.S. Federal Reserve's latest quantitative easing plan.

"We are getting to some sort of a bailout for Spain, that helps calm the market - a higher euro favors a lower dollar, a lower dollar with the support of the central banks obviously fuels equity purchases," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Volatility towards the close Friday may be increased due to 'quadruple witching' - the quarterly settlement and expiration of four different types of September equity futures and options contracts. Expiration can lead to greater volume and volatility as players adjust or exercise their derivative positions.

"The market will probably see some volatility in the sense of the swelling of volume but basically in a trading range, most likely positive," Cardillo said.

Minneapolis Fed President Narayana Kocherlakota, who has long argued that pushing too hard to get Americans back to work risks inflation, reversed course and suggested the Fed should keep rates low until the jobless rate drops to 5.5 percent.

Apple Inc will be eyed as the company's iPhone 5 hits stores around the globe, giving the consumer giant a boost ahead of the crucial end-of-year holiday season, even as rival Samsung Electronics Co steps up its legal challenge over key technologies. Apple shares advanced 0.7 percent to $703.65 in premarket trade.

Oracle Corp edged up 0.1 percent to $32.30 in premarket trading after the software maker posted first-quarter earnings that met Wall Street expectations but said hardware sales are expected to drop further after tumbling 24 percent from a year ago.

S&P 500 futures rose 3.7 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the dricontract. Dow Jones industrial average futures gained 41 points, and Nasdaq 100 futures added 8.75 points.

Michael Kors Holdings Ltd gained 3.6 percent to $54.40 in premarket trading after the company said it will likely earn more than it earlier expected in the second quarter as the fashion and accessory designer banks on strong global sales.

Darden Restaurants Inc posted first-quarter earnings that topped analysts' estimates, and the company stood by its sales and profit forecast for the year.

Vivus Inc plunged 14.6 percent to $20.25 after the company said it expects a European committee to recommend against the approval of its obesity drug Qsiva, based on preliminary feedback from the committee.

European shares pared earlier gains and briefly dipped into the red in choppy trade, with futures and options expiries unleashing volatility on the market. The FTSEurofirst 300 <.fteu3> was up 0.3 percent. <.eu/>

Asian shares rose as investors were comforted by recent central bank steps to support the global economy in the face of weak data.

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