Stock index futures rose on Tuesday as IBM rallied after its quarterly results, though indexes were slightly off their early highs following a weak report from Goldman Sachs.

Dow component International Business Machines Corp added 2 percent to $178.75, but on the downside, Goldman Sachs Group Inc fell 3 percent to $125.40 before the bell.

IBM said late Monday that new business at its services division surged more than expected in the second quarter, raising hopes 2011 would be a good year for the technology sector.

Goldman said net income rose during the second quarter but fell short of lowered market expectations as fixed income trading revenue dropped sharply.

Bank of America early Tuesday posted a second-quarter net loss of $8.8 billion after a big settlement with mortgage bond investors. Excluding charges, net income was $3.7 billion, but revenue tumbled 54 percent.

A lot of investors were worried that the recent soft patch we went through here would show up in earnings, but IBM is showing that multinationals can really fill the gap. That's encouraging, said Cort Gwon, chief strategist at HudsonView Capital Management in New York.

The big concern with Bank of America was that they were going to have more write-offs than anticipated from the settlement. But if they can put the settlement behind them, they should do well.

S&P 500 futures rose 8.4 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 added 78 points and Nasdaq 100 futures rose 18.5 points.

Coca-Cola Co reported slightly better-than-expected quarterly results on Tuesday, helped by strong growth in emerging markets. Johnson & Johnson also posted quarterly results.

Shares of Coke rose 1.1 percent to $67.88, while J&J was 0.2 percent higher at $67.20. Both stocks are Dow components.

The latest reports followed strong results from JPMorgan Chase & Co and Google Inc last week, though those results were largely overshadowed by concerns tied to government debt problems in the United States and Europe that gave the S&P its worst week in five and contributed to a decline on Monday.

Investors also awaited June housing starts data, due at 8:30 a.m. EDT <1230 GMT>. Economists in a Reuters survey forecast a 575,000 annualized rate in June versus 560,000 in May, and a total of 600,000 permits in June, compared with 609,000 in the prior month.

Two weeks before a final deadline, U.S. President Barack Obama and top lawmakers faced more pressure for a debt deal amid a growing sense that a last-ditch plan taking shape in Congress may be the only way to avoid a devastating U.S. default.

U.S. stocks dropped on Monday as bank shares bore the brunt of investor frustration over governments' inability to solve debt crises in the United States and Europe.

(Editing by Jeffrey Benkoe)

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