Stock index futures rose on Monday, feeding bullish hopes that the recent selling would ebb after last week's wild swings took the S&P 500 near a one-year low.

S&P 500 futures rose 5.6 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures gained 34 points, and Nasdaq 100 futures added 8.5 points.

The New York Federal Reserve is due to release its Empire State manufacturing survey for August at 8:30 a.m. EDT, while the National Association of Home Builders/Wells Fargo housing market index for August will be issued at 10 a.m. EDT.

Data showed Japan's economy shrank less than anticipated in the second quarter as companies made strides in restoring output following a devastating earthquake and tsunami. The data boosted Asian equities, with the Nikkei closing up 1.4 percent.

But European shares lost early gains and slipped 0.1 percent as investors focused on Tuesday's meeting between France and Germany to deal with the current financial crisis in the region.

On the earnings front, Lowe's Cos Inc reported weaker-than-expected quarterly sales and cut its fiscal-year outlook for the second time in three months as homeowners put off big renovations in an anemic U.S. economy.

Investors also awaited results from Estee Lauder Cos Inc, Sysco Corp and Agilent Technologies Inc.

The S&P 500 recorded its first two-day rally since mid-July on Friday as U.S. stocks closed one of the most volatile weeks on record. A relative drop in volume and lighter intraday swings suggested a decline in investor anxiety.

(Editing by Jeffrey Benkoe)