* China’s imports shrink for 10th straight month
* U.S. small business confidence rises in August
* Media General jumps after agreeing to buy Meredith Corp
* Futures up: Dow 271 pts, S&P 34 pts, Nasdaq 71 pts (Adds details, comment, updates prices)
By Tanya Agrawal
Sept 8 (Reuters) - U.S. stocks were set to open higher on Tuesday after weak economic data out of China bolstered hopes of more stimulus measures from the Chinese government.
Wall Street capped a tough week on Friday, with major indexes closing down more than 1 percent, after a mixed August jobs report did little to quell uncertainty about whether the Federal Reserve will increase interest rates this month.
China’s imports shrank far more than expected in August, falling for the 10th straight month. Imports fell 13.8 percent from a year earlier, more than the 8.2 percent drop economists had expected.
However, Chinese stocks rose nearly 3 percent on Tuesday as a surge in late-afternoon buying helped erase early losses. Late on Monday, China said it would remove tax on dividend incomes for investors who hold stocks for more than a year in an effort to encourage longer-term investment.
“With volatility having receded somewhat during the past few days it appears that investors have been reassessing the potential negative fallout from the slowdown in China,” said Markus Huber, a senior analyst at Peregrine & Black.
S&P 500 e-minis were up 33.5 points, or 1.74 percent, with 458,372 contracts traded at 8:32 a.m. ET (1232 GMT). Nasdaq 100 e-minis were up 70.5 points, or 1.68 percent, on volume of 78,883 contracts. Dow e-minis were up 271 points, or 1.68 percent, with 75,626 contracts changing hands.
Global financial markets have been rattled in recent weeks by fears that China’s slowdown could drag on already sluggish global growth, prompting some investors to bet that the U.S. central bank will delay a hike until the end of the year.
Following Friday’s employment data, futures market traders predicted about a 20 percent chance a rate hike will come this month, down from around 30 percent before the jobs report.
Nonfarm payrolls increased by 173,000 last month, fewer than the 220,000 that economists polled by Reuters had expected. But the unemployment rate dropped to 5.1 percent, its lowest in more than seven years, and wages accelerated.
The Fed has said it will raise rates for the first time in nearly a decade when it sees a sustained recovery in the economy. While the labor market has strengthened, inflation remains below the 2 percent target.
Data on Tuesday showed U.S. small business confidence rose modestly in August, suggesting the economy continued to grow at a steady clip halfway through the third quarter.
Federal Reserve Bank of Minneapolis President Narayana Kocherlakota is expected to speak at an event later in the day in Evanston, Illinois.
Apple shares were up 1.8 percent at $111.25 premarket a day before the iPhone maker is expected to unveil new offerings.
Fitbit was up 7.3 percent at $34.20 after Morgan Stanley upgraded the stock to “overweight”.
Alibaba was up 3.4 percent at $66.12 after German retailer Metro said it will use Alibaba’s Tmall Global platform to offer a range of German products online to Chinese consumers.
Media General jumped 22.9 percent to $13.70 after it said it would buy diversified media company Meredith Corp for about $2.34 billion to create the third-largest local TV station owner in the United States. Meredith was up 11 percent at $51. (Editing by Don Sebastian)