Stock index futures were higher on Monday after bullish comments from a Federal Reserve official about the economy, easing concerns that high oil prices could hurt economic activity.
In another boost to stocks, Warren Buffett, chairman of conglomerate Berkshire Hathaway Inc , said in his widely read annual letter the conglomerate will engage in record capital spending in the coming year.
Equities had their worst performance since November last week as the civilian revolt in Libya sparked a steep jump in crude oil prices, raising fears that higher energy could affect economic growth.
James Bullard, president of the St. Louis Fed, said the rise in oil wasn't a big enough shock to damage the recovery, adding that the U.S. economy was in very good shape for 2011.
Brent crude futures were modestly higher Monday and still at elevated levels, but off the highs of the previous week. JPMorgan raised its average forecast for Brent by nearly 14 percent for 2011, citing the impact from Libya.
Traders are biding their time to see how the situation in Libya plays out and how it impacts crude prices, said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania. With earnings season mostly over, issues like that will have an out-sized impact.
The dollar fell to three-month lows on expectations the threat to growth from high oil would keep U.S. monetary policy loose, in contrast to the more hawkish outlooks of other major central banks.
S&P 500 futures rose 4 points 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 43 points and Nasdaq 100 futures put on 7.25 points.
U.S.-listed shares of HSBC Holdings Plc fell 3.8 percent to $55.07 in premarket trading after cutting its profit targets due to costs from tougher banking regulations.
Amazon.com Inc fell 2.1 percent to $173.50 in premarket trading after UBS downgraded shares of the online retailer to neutral from buy, citing increased costs.
Private equity firm Blackstone Group LP will pay about $9.4 billion for nearly 600 U.S. shopping malls and other properties of Australia's debt-laden Centro Properties , a source said.
January pending home sales, which will be released after the market opens, are seen falling 2.2 percent after a rise in the previous month.
Companies scheduled to report quarterly results include AES Corp , Edison International and Range Resources Corp .
U.S. stocks rose on Friday, bouncing back from a three-day sell-off as oil stabilized, but unease over Libya was seen keeping buying in check.