NEW YORK ( TheStreet) -- U.S. stock futures were rising as a positive outlook from Alcoa ( AA) raised hopes that the domestic economy can weather the European debt crisis.

Futures for the Dow Jones Industrial Average were up 119 points, or 122 points above fair value, at 12,334. Futures for the S&P 500 were up 14 points, or 13 points above fair value, at 1290. Futures for the Nasdaq were up 22 points, or 22 points above fair value, at 2360.

Despite projections for weaker fourth-quarter earnings from U.S. corporations, a chorus of analysts say that extreme bearishness is making way for potential upside surprises in stocks.

"The good news is expectations are low despite the economy showing some signs of improvement," wrote Gary Thayer, chief macro strategist at Wells Fargo Advisors. "We believe investors are more likely to see better-than-expected results rather than weaker-than-expected results."

Alcoa ( AA), which unofficially marked the beginning of the earnings season, was gaining 2.4% in premarket trading despite reporting its first quarterly loss since 2009 after Monday's close. The company said it lost 3 cents a share in the quarter, in line with analysts' estimates. However, it reported revenue of $5.99 billion in the fourth quarter, beating the forecast for $5.7 billion, and gave a positive outlook on global demand for aluminum.

In U.S. economic news, the National Federation of Independent Business said that small businesses grew more confident about the economy's future in December for the fourth straight month. NFIB's Small Business Optimism Index rose by 1.8 to 93.8 points. While still below levels seen before the recession, the reading bodes well for the domestic jobs market and the larger economic recovery. Research firm High Frequency Economics estimates that small businesses account for about half of gross domestic product growth in the U.S. and half of all employment.

Later at 10 a.m., the Census Bureau is expected to report that wholesale inventories rose 0.5% for November, according to a poll by Thomson Reuters, adding to a 1.6% gain in October.

The euro was rising for the second day ahead of a meeting between German Chancellor Angela Merkel and International Monetary Fund head Christine Lagarde. Several meetings between key leaders in the region are expected to set the stage for a European Union summit meeting in Brussels on Jan. 30. Jitters ahead of bond auctions in Spain and Italy later in the week also kept a cap on optimism Tuesday.

Germany's DAX was rising 2.87% while London's FTSE was up 1.35%. Japan's Nikkei Average settled 1.16% lower and Hong Kong's Hang Seng was up 1.47%.

In corporate news, Juniper Networks ( JNPR), the communications networking equipment maker, lowered its fourth-quarter outlook, citing weak demand from service providers. Juniper said it now expects non-GAAP earnings of 26 cents to 28 cents a share on revenue ranging from $1.11 billion to $1.12 billion. In October, the company forecast non-GAAP earnings of 32 cents to 36 cents a share for the period on revenue of between $1.16 billion to $1.22 billion. Analysts polled by Thomson Reuters forecast a profit of 34 cents a share in the December-ended period on revenue of $1.19 billion.

Philips Electronics ( PHG), the world's leading lighting maker, warned fourth-quarter profit would be soft because of weakness in European markets. "Our expected fourth quarter financial results have been affected by the weakness in Europe, which has impacted our health care business, as well as pricing in our consumer lighting business," said CEO Frans van Houten. Philips said it expected fourth-quarter underlying earnings of about €500 million, down from €910 million a year earlier.

Liz Claiborne ( LIZ) issued a disappointing financial outlook because of negative same-store sales performance and soft margins for its Juicy Couture brand. It also said Chief Financial Officer Adam Warren is leaving by mutual agreement. The company now sees fiscal 2011 pro forma adjusted earnings before interest, taxes, depreciation and amortization at the low end of its previously disclosed range of $80 million to $90 million. Direct-to-consumer same-store sales for Juicy Couture were down 7% and 5% in November and December, respectively. For fiscal 2012, Liz Claiborne now sees adjusted EBITDA of $125 million to $140 million vs. a prior projection of $130 million to $150 million. Shares were plunging 9.9% to $8.95 in premarket trading.

February oil futures were up $1.38 to $102.69 a barrel. In other commodities, February gold futures were up $31.30 to $1639.40 an ounce.

The dollar index was down 0.08%. The benchmark 10-year Treasury was down 5/32, pushing the yield to 1.981%.

-- Written by Chao Deng in New York.

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