* China cuts interest rate for second time in two months
* Oil prices rebound but still near 6-1/2-year lows
* Apple up 5.1 pct, BofA leads banks higher
* Futures up: Dow 522 pts, S&P 62 pts, Nasdaq 152 pts (Adds details, comment, updates prices)
By Tanya Agrawal
Aug 25 (Reuters) - U.S. stocks looked set to rebound sharply on Tuesday as investors seek out bargains a day after Wall Street turned in its worst performance in four years.
Markets also got a shot of good news with China’s second interest rate cut in two months, but analysts stopped short of declaring that the worst was over.
“What we need to see to calm investors is positive economic data points out of China and only when we see that will the rallies be sustainable,” said Xavier Smith, investment director at Centre Asset Management.
“Right now, it’s pretty meaningless,” he said of the interest rate cut.
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.
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.
“In the short term, the market was very oversold,” said Adam Sarhan, chief executive of Sarhan Capital in New York.
“Global demand remains lackluster at best and while I expect the market to move mostly sideways, whatever action we are going to see today is going to be very sloppy.”
The move by China’s central bank came after Chinese stocks slumped 8 percent on Tuesday. They fell 8.5 percent on Monday amid growing concerns about slowing economic growth.
S&P 500 e-minis were up 61.5 points, or 3.29 percent, with 645,739 contracts traded at 8:18 a.m. ET (1218 GMT).
Nasdaq 100 e-minis were up 151.5 points, or 3.78 percent, on volume of 104,481 contracts.
Dow e-minis were up 522 points, or 3.32 percent, with 84,817 contracts changing hands.
All 30 Dow stocks were in the black in premarket trading.
The dollar, which fell to a 7-month low against a basket of currencies on Monday, recovered slightly.
Oil prices were up about 3 percent, bouncing back from heavy losses on Tuesday, but U.S. crude still remained below $40 per barrel.
Investors will be keeping an eye on economic data due later in the day. The Conference Board’s U.S. consumer confidence index, due at 10 a.m. ET, is expected to have risen to 93.4 in August from 90.9 last month.
Other data is expected to show that U.S. single-family home prices rose in June. The data is expected at 9 a.m. ET.
Apple’s shares were up 5.1 percent at $108.43 in premarket trading. The stock had slumped as much as 13 percent on Monday, before ending down 2.5 percent.
Disney was up 3.2 percent at $98.39, while Alibaba was up 4.5 percent at $68.75.
All big U.S. banks were higher, with Bank of America up 6.1 percent at $16.22. (Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D‘Souza and Saumyadeb Chakrabarty)