Stock index futures pointed to a strongly higher open on Wall Street on Monday, with futures for the S&P 500 up 1.2 percent, Dow Jones futures up 1 percent and Nasdaq 100 futures up 1.3 percent at 0907 GMT (5:07 a.m. ET).

Telecom shares will be in the spotlight after AT&T Inc said it plans to pay $39 billion for Deutsche Telekom AG's T-Mobile USA, sparking a sharp rally in European telecom shares, with Deutsche Telecom up 13 percent and Vodafone up 4.4 percent.

Investors kept a close eye on news coming out of Japan, where power cables have been connected to all six nuclear reactors at the tsunami-damaged Fukushima Daiichi power plant. The World Health Organization said on Monday that radiation in food after an earthquake damaged a Japanese nuclear plant was a serious situation.

The market was also closely following the situation in Libya, where Western powers launched a second wave of air strikes early on Monday after halting the advance of Muammar Gaddafi's forces on Benghazi and targeting air defenses to let their planes patrol the skies, sending U.S. crude oil futures up $1.64 at $102.71 a barrel.

European stocks were up 1.6 percent in early trade, powered by surging telecom shares. Japanese markets were closed for a holiday.

Billionaire investor Warren Buffett believes Japan's devastating earthquake is the kind of extraordinary event that creates a buying opportunity for shares in Japanese companies.

U.S. stocks gained after a week of heightened volatility on Friday, but investors were reluctant to make big bets due to turmoil in the Middle East and Japan's nuclear crisis.

The Dow Jones industrial average <.DJI> was up 83.93 points, or 0.71 percent, at 11,858.52. The Standard & Poor's 500 Index <.SPX> was up 5.49 points, or 0.43 percent, at 1,279.21. The Nasdaq Composite Index <.IXIC> was up 7.62 points, or 0.29 percent, at 2,643.67.

(Reporting by Blaise Robinson; Editing by Hans Peters)