* Futures up: Dow 510 pts, S&P 60.25 pts, Nasdaq 161 pts
By Tanya Agrawal
Aug 25 (Reuters) - U.S. stock index futures rose sharply on Tuesday in anticipation of bargain hunting a day after Wall Street turned in its worst performance in four years and as China cut interest rates for the second time in two months.
* All three major Wall Street indexes fell into correction mode over the past two trading days. An index is said to be in correction when it closes 10 percent or more below its 52-week high.
* "I think it's too early to declare the worst is over," said Piotr Matys, an emerging markets expert at Rabobank in London. "The way I see it is that this is a bit of a technical correction after things got a bit oversold."
* The move by China's central bank, which also relaxed reserve requirements for the second time in two months, came after Chinese stocks slumped 8 percent on Tuesday.
* The dollar index, which fell to a 7-month low on Monday, recovered slightly to trade up 0.76 percent.
* Oil price were up more than 3 percent, bouncing back from heavy losses on Tuesday, but U.S. crude remained below $40 per barrel amid lingering concerns about China's economic growth.
* On Monday, the Dow Jones industrial average briefly slumped more than 1,000 points - its steepest intraday fall ever - and the S&P 500 recorded its worst day since 2011.
* Apple's shares were up 6 percent at $109.38 in premarket trading. The stock had slumped as much as 13 percent on Monday, before ending down 2.5 percent.
* Disney was up 3.7 percent at $98.90, while Alibaba was up 5.6 percent at $69.48.
Futures snapshot at 7:04 a.m. ET (1104 GMT):
* S&P 500 e-minis were up 60.25 points, or 3.22 percent, with 541,504 contracts traded.
* Nasdaq 100 e-minis were up 161 points, or 4.02 percent, on volume of 83,363 contracts.
* Dow e-minis were up 510 points, or 3.25 percent, with 71,492 contracts changing hands. (Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D'Souza)