U.S. stocks were set for a higher open on Monday as merger activity and solid earnings, including Exxon Mobil, overshadowed concerns about the possible spread of unrest in Egypt to other parts of the Middle East.
Alpha Natural Resources said on Saturday it agreed to a $7.1 billion deal to buy Massey Energy Co, which would create the second largest U.S. coal miner by market value.
Massey shares jumped 11.2 percent in premarket trading to $63.65 while Alpha Natural slid 6.7 percent to $53.99.
Exxon Mobil Corp climbed 1 percent to $79.94 after the world's largest publicly traded oil company reported a higher-than-expected 53 percent increase in quarterly profit.
The merger and earnings action overshadowed fears of political unrest spreading to oil-producing Middle Eastern countries, driving up crude prices and threatening global growth prospects.
Protests to end the 30-year rule of President Hosni Mubarak continued, heightening risk aversion for European investors already concerned by their region's sovereign debt crisis and inflation.
(Egypt) is definitely not cleared up, but what is clear in the mind of the market is that there is an intelligent alternative to the current state of affairs, said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.
In the meantime, earnings have been quite good, guidance has largely been quite positive and macro trends remain, at the very minimum, modestly positive.
S&P 500 futures rose 5.9 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 rose 33 points and Nasdaq 100 futures rose 7.25 points.
Further supporting the gains in stock futures was Commerce Department data that showed U.S. consumer spending rose more than expected in December to post a sixth straight month of gains.
Economic data still on tap for Monday includes the Chicago PMI for January, due out at 9:45 a.m..
In other M&A action, CNOOC Ltd will pay $1.3 billion in its second shale deal with America's Chesapeake Energy Corp, the latest move by China's top offshore oil producer in its aggressive drive for overseas acquisitions.
Chesapeake advanced 1.2 percent to $27.67 before the open.
Warehouse and distribution center owner AMB Property Corp and rival ProLogis said they would merge, one of the biggest real estate deals since the financial crisis.
ProLogis gained 2.2 percent to $15.55 and AMB added 3 percent to $33.90 in premarket trade.
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)