US STOCKS-Futures flat after two-day rally, France downgrade
* Moody's cuts France credit rating
* Best Buy earnings on tap
* Housing starts data expected
* Futures up: Dow 2 pts, S&P 1.1 pts, Nasdaq 3 pts
By Chuck Mikolajczak
NEW YORK, Nov 20 (Reuters) - U.S. stock index futures were little changed on Tuesday, indicating the S&P 500 index may pause after a two-day rally as a credit downgrade of France by Moody's reminded investors of the problems plaguing the global economy.
* The benchmark S&P index had risen more than 2 percent in the previous two sessions, spurring by optimism a deal could be reached in the U.S. to stave off the looming "fiscal cliff," a series of tax and spending changes that will begin to take effect in the new year.
* Moody's Investors Service cut France's sovereign rating by one notch to Aa1 after the market close on Monday, citing an uncertain fiscal outlook as a result of the weakening economy.
* While the move was expected after a similar downgrade by peer Standard & Poor's in January, it served as a reminder of the headwinds faced by the global economy as a result of the region's debt crisis.
* Also in the euro zone, finance ministers will give a tentative go-ahead for the disbursement of 44 billion euros in emergency loans to Greece on Tuesday, but the money will only be paid on Dec. 5 if the country meets all remaining conditions.
* The S&P 500 index had fallen 5.3 percent between election day and the start of the rebound as angst over the prospects of a deal gave investors reason to sell stocks broadly in an effort to limit the tax hit both this year and in 2013.
* President Barack Obama and the U.S. Congress hope to start serious negotiations after this week's Thanksgiving holiday on Thursday on how to avoid the "fiscal cliff," which has politicians and economists worried about the direction of the world's largest economy.
* S&P 500 futures rose 1.1 points and were roughly even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 2 points, and Nasdaq 100 futures added 3 points.
* Economic data expected on Tuesday includes housing starts and permits data for October at 8:30 a.m. (1330 GMT). Economists in a Reuters survey forecast a 840,000 annualized rate versus 872,000 in September, and a total of 865,000 permits compared with 890,000 in the prior month.
* Later in the session at 12:15 p.m (1715 GMT), Federal Reserve's Chairman Ben Bernanke speaks before the Economic Club of New York, a speech that may offer a fresh chance to gauge the Fed's appetite for more monetary stimulus. Market participants currently expect the Fed to step up asset purchases in 2013 after Operation Twist expires.
* Best Buy reports quarterly results, expected to show a fall in earnings per shares to $0.12 from $0.47, as the world's largest consumer electronics chain struggles to fend off online and discount rivals. Investors are awaiting word on whether founder and top shareholder Richard Schulze comes through with a formal bid to take the company private.
* As earnings season draws to a close, other companies expected to post earnings Tuesday include Salesforce.com Inc , Campbell Soup Co , H.J. Heinz Co and Hewlett-Packard Co.
* European shares edged lower on Tuesday, with France's CAC 40 index among the worst hit after ratings agency Moody's stripped the euro zone's No. 2 economy of its top credit rating.
* Asian shares rose on hopes of a compromise in the U.S. fiscal cliff negotiations.
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