* European banks borrow more than expected from ECB
* Second estimate on 4th-qtr U.S. GDP on tap
* Monthly market volume drops 12 pct from Feb 2011
* Futures up: Dow 11 pts, S&P 2 pts, Nasdaq 3 pts
By Rodrigo Campos
NEW YORK, Feb 29 (Reuters) - U.S. stock index futures edged up on Wednesday after European banks absorbed more than half a trillion euros as part of an effort to stabilize the euro zone’s financial system.
The U.S. stock market is seen adding to the previous day’s gains that catapulted the Dow industrials and the S&P 500 above key levels to close at multi-year highs.
Banks grabbed a more-than-expected 530 billion euros in the European Central Bank’s second offering of low-cost 3-year loans, fueling hopes more credit will flow to businesses and government borrowing costs will ease further.
An index of European bank shares rose 1 percent while a pan European benchmark index added 0.3 percent.
The cash injection takes the European credit crisis out of the spotlight in the short term, leaving traders and investors to focus on fundamentals, which have not disappointed.
“As the ECB has minimized the worst case scenario in Europe, the markets have the luxury of focusing on stabilization in some central European data, the economic renaissance in the U.S. and the fact China will engineer (something close to) a soft landing,” said Stephen Wood, chief market strategist at Russell Investments in New York.
S&P 500 futures rose 2 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures gained 11 points, and Nasdaq 100 futures added 3 points.
The Dow closed above 13,000 for the first time since May 2008 on Tuesday, while the S&P ended above 1,370, its May 2011 intraday high, possibly enticing money managers afraid to miss out on gains. But some analysts warned this year’s rally has come in lighter volume, and further gains could trigger selling.
Daily volume on the New York Stock Exchange, NYSE Amex and Nasdaq has averaged 6.87 billion shares in February. The average in February 2011 was 7.81 billion.
Economic data Wednesday includes the second estimate on fourth quarter U.S. gross domestic product expected at 8:30 a.m. EST (1330 GMT), and February Chicago PMI at 9:45 a.m. EST (1445 GMT).
For GDP, economists in a Reuters survey forecast a 2.8 percent annualized pace of growth, a repeat of the first fourth-quarter increase estimate. For PMI, economists see a reading of 61.5, compared with 60.2 in January.