US STOCKS-Market up slightly, factory orders on tap

* Upcoming data to reveal state of economy

* Futures: Dow up 24 pts, S&P up 0.2, Nasdaq up 8.5

* For up-to-the-minute market news see [STXNEWS/US] (Adds quote, updates prices)

By Chuck Mikolajczak

NEW YORK, July 5 (Reuters) - U.S. stock index futures rose slightly on Tuesday before factory orders data and after stocks had their best week in two years last week.

The Commerce Department releases May factory orders data at 10 a.m. [1400 GMT]. Economists in a Reuters survey expect a rise of 1.0 percent compared with a 1.2 percent drop in the prior month.

Equities have rallied for five straight days, rebounding from a spate of weakness over the last two months. Moves to avert a debt crisis in Europe and surprisingly strong regional business data helped lift some of the gloom on Wall Street.

"We do have factory orders. The market certainly could be headed for some sort of a pullback. We've had a strong performance over the past week and any slight disappointment would invite some profit-taking," said Peter Cardillo, chief market economist at Avalon Partners in New York.

"We are going to begin to see some of the data actually turn up and pointing to better times ahead in terms of the economy and certainly negating any new downward trend -- the soft patch obviously temporary."

S&P 500 futures added 0.2 point and were slightly above 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 gained 24 points, and Nasdaq 100 futures rose 8.5 points.

Volume is expected to remain low in the holiday-shortened week, which could increase volatility. Markets were closed on Monday for the U.S. Independence Day holiday.

Specialty chemicals maker OM Group Inc is making a push into Europe with the acquisition of German magnetic materials maker Vacuumschmelze GmbH & Co KG for $993.2 million. [ID:nL3E7I50NI]

Healthy, middle-aged smokers who take Pfizer's Chantix or Champix, one of the most popular quit-smoking drugs, have a higher risk of suffering heart attacks or other serious heart problems, a study found on Monday. [ID:nL6E7I425W]

China's Baidu is to partner with Microsoft for English-language search, giving the U.S. software giant a chance to expand its tiny Web presence in a market Google has stepped back from. The venture will help the Chinese company's international ambitions.

Microsoft shares gained 0.5 percent to $26.15 in premarket trading and Baidu added 1 percent to $144.72.

European shares edged up, extending the rises for a seventh session, though strategists were advising caution as weak euro zone economic data cast fresh doubts on the strength of the recovery. [.EU]

Asian stocks pulled back slightly from a one-month high as some investors took profits from their recent rally. [ID:nL3E7I502Z]

U.S. stocks started July with a bang on Friday as Wall Street scored its best week in two years on strong manufacturing data that eased concerns about slowing growth. [ID:nN1E7601LI] (Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)