Stock index futures pointed to a higher open on Wall Street on Monday, with futures for the S&P 500, Dow Jones and Nasdaq 100 all up around 0.5 percent by 4:42 a.m. EDT.

European stocks were up 0.3 percent in morning trade, as a rally in heavyweight energy shares such as BP and Royal Dutch Shell helped the market keep its recovery rally alive.

Japan's economy shrank much less than expected in the second quarter as companies made strides in restoring output after the devastating earthquake in March. The Nikkei gained 1.4 percent.

On the macro front, New York Federal Reserve is set to release its Empire State Manufacturing Survey for August, while National Association of Home Builders/Wells Fargo will issue its August housing market index.

U.S. 10-year Treasury note futures dipped in Asian trading as equities showed signs of stabilizing after last week's wild swings, tempering safe-haven demand for Treasuries.

U.S. crude oil futures were up 44 cents at $85.82 a barrel, while gold lost ground.

On the earnings front, investors awaited results from Agilent Technologies, Estee Lauder Cos, Lowes Cos and Sysco Corp.

U.S. stocks ended higher on Friday in a tentative sign that the worst of the selling may be over.

The Dow Jones industrial average gained 125.71 points, or 1.1 percent, to 11,269.02. The Standard & Poor's 500 Index added 6.17 points, or 0.5 percent, to 1,178.81. The Nasdaq Composite Index rose 15.30 points, or 0.6 percent, to 2,507.98.

(Reporting by Blaise Robinson; Editing by David Holmes)