Wall Street stocks were set to open about 1 percent higher on Monday on hopes euro zone policymakers were putting together new measures to help ease the region's debt crisis, but the lack of clarity on their potential effectiveness was seen keeping markets volatile.

A move by European leaders to strengthen the European Financial Stability Facility bailout fund as well as reports of a possible repurchase of covered bonds by the European Central Bank lifted investor sentiment.

Markets have recently focused on European moves to contain the spread of a credit crisis that has Greece teetering toward a default. ECB bond-buying reports lifted equities and other risky assets as any purchases would lower borrowing costs for struggling euro-zone economies and keep the specter of sovereign defaults at bay.

European shares <.FTEU3> rose 2.1 percent, with banks <.SX7P> up 4 percent. An exchange-traded fund of U.S. financial stocks rose 1.9 percent.

After a weekend of being told by the United States, China and other countries they must get more aggressive in their crisis response, European officials focused on ways to beef up the existing 440 billion-euro rescue fund.

A lot of the day-to-day movement in European markets has to do with investors' estimation on which way the political will is moving, said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

He said the rise in U.S. stock futures was directly linked to gains in European stocks, specifically bank shares.

We can be plus or minus sharply any day based on where the news flow goes, De Gan said. We're heading for another volatile week.

S&P 500 futures rose 13.5 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 103 points, and Nasdaq 100 futures added 16 points.

German business sentiment fell for a third straight month but topped forecasts, also helping to lift equities and the euro.

U.S. economic data on tap includes the Commerce Department's new home sales for August, due at 10 a.m. EDT (1400 GMT). Economists in a Reuters survey forecast a total of 295,000 annualized units, compared with 298,000 units in July.

Semiconductor stocks could gather bids after UBS upgraded Advanced Micro Devices Inc to buy from neutral. AMD shares gained 3.7 percent to $6.40 in premarket trading.

(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)