* April consumer spending up 1 pct vs est. 0.7 pct rise
* Celator jumps over 70 pct after agreeing to be acquired
* Futures up: Dow 32 pts, S&P 2.5 pts, Nasdaq 7.5 pts (Updates prices; adds details, comments)
By Yashaswini Swamynathan
May 31 (Reuters) - Wall Street was set to open higher on Tuesday after strong consumer spending data gave the latest sign of improvement in economic growth and supported the Federal Reserve’s stance to increase interest rates in the coming months.
U.S. consumer spending surged 1.0 percent in April, its biggest increase in more than six years and beating economists’ expectation of a 0.7 percent rise.
The personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, rose 0.2 percent last month.
In the 12 months through April, the core PCE rose 1.6 percent after a similar increase in March. The core PCE is the Fed’s preferred inflation measure and is running below the U.S. central bank’s 2 percent target.
Fed Chair Janet Yellen said on Friday a rate hike in the coming months would likely be appropriate, pointing to an improvement in the economy and a strong labor market.
Yellen’s comments, which came after months of uncertainty on the Fed’s stance on rates swayed the markets, and the strong data on Tuesday come ahead of the comprehensive U.S. jobs data at the end of this week.
“I think most people are looking towards the end of the week with the employment report likely to have a big influence of what the Fed may do in the months ahead,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
Brown said the markets have been taking comments on rate hikes relatively well. “In December, the markets held up pretty well when the Fed raised rates, it wasn’t until the early part of this year when we got a reaction.”
Dow e-minis were up 32 points, or 0.18 percent at 8:38 a.m. ET (1238 GMT), with 33,858 contracts changing hands.
S&P 500 e-minis were up 2.5 points, or 0.12 percent, with 212,896 contracts traded.
Nasdaq 100 e-minis were up 7.5 points, or 0.17 percent, on volume of 31,465 contracts.
Yellen’s comments helped Wall Street close higher on Friday, capping off its strongest week since March, and traders raised their expectations of a rate hike in June, to 28 percent from just over 4 percent, according to CME Group’s FedWatch tool.
The benchmark S&P 500 index has risen about 1.6 percent in May and is set to record its third straight month of gains. U.S. markets were closed on Monday for the Memorial Day holiday.
St. Louis Fed President James Bullard said on Monday that global markets appear to be “well-prepared” for a summer rate hike, although he did not specify a date for the policy move. The Fed next meets on June 14-15.
A report from the Conference Board on consumer confidence is expected to show the index at 96.0 in May, up from a reading of 94.2 in April. The data is expected at 10:00 a.m. ET (1400 GMT).
Celator Pharma jumped 71.3 percent to $30.03 premarket after agreeing to be bought by Jazz Pharma for about $1.5 billion. Jazz Pharma was down 1.4 percent at $150.
Cliffs Natural Resources rose 24.76 percent to $3.83 after JP Morgan upgraded the stock and the iron ore producer signed a supply agreement with ArcelorMittal.
Utility Westar Energy was up 8.6 percent at $57.50 after agreeing to be bought by Great Plains for $8.6 billion. Great Plains was down 8.3 percent. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D’Souza)