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The Valencia, California-based company said it was informed on Monday that the U.S. Food and Drug Administration would not make a decision on whether to approve the product, a whistle-sized inhaled insulin device, by its December 29 deadline.

MannKind, whose founder and biggest shareholder is Alfred Mann, an 85-year-old entrepreneur who made his fortune developing solar cells, insulin pumps and implantable technology to help hearing, has plenty of detractors.

As of November 30, roughly 24 percent of the company's regularly traded shares were held "short" by investors betting the stock will fall.

The device, known as Afrezza, has already been turned back once by the FDA, which said in March it would not approve the product until it had received more information. The company believes it has provided that information.

In July, the FDA accepted a resubmission on the product, and it was due to make its decision by Wednesday.

MannKind's shares rose 6.4 percent to $8.48 in premarket electronic trading.

(Reporting by Toni Clarke and Esha Dey, editing by Dave Zimmerman)

* Japanese factory output rose for the first time in six months in November, and manufacturers expect to boost production in coming months, suggesting that firm demand in Asia will help the economy resume a recovery early next year.

* Economic data expected for Tuesday include the S&P/Case Shiller home prices indexes for October at 9 a.m. 1400 GMT and consumer confidence for December at 10 a.m. 1500 GMT.

* "We have some economic data today in which we should see a new burst of consumer enthusiasm as consumer confidence jumps up," said Peter Cardillo, chief market economist at Avalon Partners in New York.

* "Japan production rose, another good sign for the global economy. So the rally should continue right up until the new year and into the new year based on stronger economic growth both domestically and globally in 2011."

* Trading volumes, already light for the holiday season, were expected to remain thin as the northeastern United States digs itself out from a blizzard that disrupted air and rail travel at the end of the busy Christmas weekend.

* The blizzard pushed oil prices up to just below a more than two-year high struck the previous session with U.S. crude for February up 40 cents at $91.40 a barrel.

* S&P 500 futures rose 2.8 points and were 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 19 points, and Nasdaq 100 futures added 3.75 points.

* Inhaled-insulin developer MannKind Corp (MNKD.O) said the U.S. health regulator would not be able to complete the review of Afrezza by December 29 and would require about four more weeks.

* Nasdaq OMX Group (NDAQ.O) is considering a second stab at setting up a market in Japan with the Osaka Securities Exchange (8697.OS), hoping to attract investors from emerging Asian economies, domestic media reported.

* Shares in Japan and China eased on Tuesday as concerns that further Chinese monetary policy tightening will cool the engine of world economic growth.

* European shares rose on Tuesday, with Alcatel-Lucent (ALUA.PA) leading gains in the technology sector after it agreed to settle a bribery case, though volumes were low as the London equity market remained closed. .EU

* Wall Street erased losses and ended little changed on Monday as investors shrugged off the surprise weekend interest rate hike from China's central bank.

(Reporting by Chuck Mikolajczak; Editing by Padraic Cassidy)

It is the first major purchase by Japan's No.2 life insurer since its $11 billion stock market debut in April, and is another deal for Australia's $1.2 trillion wealth management sector, which is growing thanks to compulsory private pension schemes.

While Dai-ichi did not raise any money through its IPO, it said it would use it as a springboard to push into overseas markets to address concerns about its growth prospects in Japan, where the population is shrinking.

It will pay A$4.00 per share for all the shares it does not own in Tower Australia, a 47 percent premium over Tower's latest closing price. Dai-ichi is currently the biggest shareholder in the midsized life insurer, with a 29 percent stake.

"This is a positive move," said Ryosuke Okazaki, chief investment officer at ITC Investment Partners in Tokyo.

"Top management is being decisive and if it did not take steps like this there wouldn't have been any point to it becoming a listed company."

The buyout ranks as the Japan's third biggest insurance acquisition after Tokio Marine Holdings, Japan's No. 2 non-life insurer, spent $4.7 billion to buy U.S. insurer Philadelphia Consolidated and 442 million pounds to buy Lloyd's of London insurer Kiln Plc.

Overseas acquisitions made by Japanese insurers hit a peak in 2008 with 547 billion yen worth of deals struck. This year there has been 109 billion yen worth of transactions made.

Dai-ichi said the deal will increase the amount of net profit derived from overseas to 9 percent from 3 percent. It had 55.6 billion yen net profit for the year ended March 2010.

Dai-ichi also has minority stakes in Ocean Life Insurance Co in Thailand and Star Union Dai-ichi Life Insurance Co in India.

AUSTRALIAN MARKET

Australia's wealth management sector is the world's fourth-largest and has recently seen much M&A activity, with Australian wealth manager AMP and French insurer AXA SA launching a new $13.1 billion-plus bid for AXA Asia Pacific last month.

Private equity firm Kohlberg Kravis Roberts & Co offered $1.7 billion for wealth manager Perpetual, although the deal fell through this month.

Tower Australia's principal activities include life insurance, funds management, superannuation, financial planning, and investment management.

Dai-ichi's shares rose 2.1 percent to 133,600 yen in Tokyo after the Nikkei business daily first reported the deal earlier on Tuesday.

"The recent European proposals for reform of the economic governance of the euro area go in the right direction, but are not ambitious enough to ensure a healthy and efficient functioning of monetary union," Mersch said in a statement.

Firstly, excessive deficit procedures should have a faster trigger, with sanctions applied early and "quasi-automatically," he said. Secondly, greater emphasis should be put on national debt levels, he added.

The sovereign debt crisis had its roots in the fact that euro zone countries were unable to properly monitor each others' economic policy, and procedures should be put in place to correct that, Mersch added.

"Beyond these new mechanisms, whose activation should also occur only in exceptional circumstances and under strict compliance, it is crucial that states should learn from this crisis by intensifying their efforts to consolidate," Mersch said in a new year statement as president of Luxembourg's central bank.

(Reporting by Robert-Jan Bartunek and Pete Harrison)

The euro spiked against the dollar, although market players attributed its strength to technical factors in light holiday trade, and oil edged up near a 26-month high as a snow storm in the U.S. northeast underpinned demand expectations.

Data from Japan showed factory output rose for the first time in six months in November and a survey of manufacturers revealed they expected to boost production in the coming months to meet firm demand from the rest of Asia.

"Data in recent weeks have been supportive of the stocks and commodity markets globally," said David Cohen, director of Asian economic forecasting at Action Economics.

"The U.S. will avoid a double-dip. The Asian region including Japan looks a little bit better, with its industrial production finally showing an increase."

But despite some positive signs on the outlook, investors entering thin year-end trading remained concerned about Chinese monetary policy tightening in the months ahead.

The timing of China's Christmas Day interest rate rise may have surprised but the move itself did not, with Chinese leaders pledged to make fighting inflation a priority in 2011.

World shares mostly fell on Monday in response to the move, as investors fretted that tighter monetary policy would moderate the growth that many are relying on to support the global economic recovery.

On Tuesday, MSCI's broadest index of Asia shares outside Japan, which is up nearly 13 percent for the year, rose 0.1 percent.

But Shanghai shares fell 1 percent, after a 2 percent drop the previous day, and Tokyo's Nikkei shed 0.6 percent.

"Investors locked in profits as Shanghai shares fell in late trade yesterday," said Kazuhiro Takahashi, general manager at Daiwa Capital Markets. "They didn't want to buy further as uncertainty remained for Chinese shares."

With Australian markets closed for a holiday the main stock gains in Asia were in South Korea, where the benchmark index rose 0.6 percent, led by a 1.7 percent rise for Samsung Electronics.

U.S. stocks finished little moved on Monday, with the Dow Jones industrial average down 0.2 percent but the Nasdaq Composite 0.1 percent firmer.

EURO JUMPS

The euro rose sharply as bears who had been betting on further weakness due to worries about the continent's sovereign debt crisis were forced to abandon their positions.