U.S. stock index futures pointed to a higher open on Wall Street on Monday, with futures for the S&P 500 up 0.31 percent, Dow Jones futures up 0.16 percent and Nasdaq 100 futures up 0.3 percent.

* UAL Corp , parent of United Airlines, will buy Continental Airlines Inc for $3.2 billion, forming the world's largest carrier in a merger that further shrinks the embattled U.S. airline industry and could drive up air fares, sources said on Sunday.

* Warren Buffett on Sunday intensified his feisty defense of a controversial mortgage transaction marketed by Goldman Sachs Group Inc , saying the investment bank's behavior does not warrant public fury. Buffett also said he is seeing real signs of improvement in the economy, especially in manufacturing, though it will take another year for a sustainable housing recovery to take hold.

* On the macro front, investors awaited a flurry of data including figures from the Institute of Supply Management. The median Reuters forecast of 32 economists for the ISM's manufacturing index is 60.0, up from 59.6 in March. The market will also keep a close eye on car sales for April.

* On the earnings side, Clorox , Loews Corp. and Anadarko Petroleum Corp. feature among the companies due to report on Monday.

* European nations aim to formally launch the largest ever financial rescue of a country this week, hoping to ease contagion fears, but the euro fell and European stocks dropped on doubts about whether Greece can sustain the austerity measures it has promised in exchange for the 110 billion euro ($146 billion) package.

* Energy shares will be in the spotlight again as the huge oil slick caused by an underwater leak continued to creep toward the U.S. Gulf Coast on Monday. The Obama administration pressed energy giant BP Plc to stem the oil gushing from its ruptured offshore well.

* Oil shed early gains to hover around $86 a barrel in thin trade on Monday, as concerns about the Euro zone's fiscal woes returned to the fore, while fresh steps by China to cool its economy added to near-term uncertainty.

* Investors were also digesting news of a failed car bombing in New York. Investigators combed through security video and other evidence on Monday in the hunt for suspects and officials expressed optimism that the culprits will be found.

* In Asia, China on Sunday raised the proportion of deposits that lenders must keep in reserve at the central bank, another step in the country's campaign to remove excess cash in the economy.

* European shares were down 0.5 percent in morning trade, falling on concerns the massive bailout of Greece may face political hurdles and on doubts about whether Greece can sustain the tough austerity measures, but volumes were thin as UK markets were closed for a holiday <.EU>. Japanese markets were also closed for a holiday.

* U.S. stocks tumbled on Friday to close out the worst week since January as news of a criminal probe into Goldman Sachs unnerved investors already anxious about the prospects for heavy regulation from Washington.

* The Dow Jones industrial average <.DJI> fell 158.71 points, or 1.42 percent, to 11,008.61. The Standard & Poor's 500 Index <.SPX> lost 20.09 points, or 1.66 percent, to 1,186.69. The Nasdaq Composite Index <.IXIC> dropped 50.73 points, or 2.02 percent, to 2,461.19.

(Reporting by Blaise Robinson; Editing by Mike Nesbit)