Stocks were set for a sharply higher open on Monday on hopes that fresh proposals could be emerging out of Europe to help solve the region's debt crisis.

Germany and France were exploring radical ways to integrate euro zone countries in order to impose tighter budget control, European Union sources told Reuters over the weekend.

Sentiment was also boosted after an Italian newspaper report suggested the International Monetary Fund was preparing a rescue plan for Italy worth up to 600 billion euros. The IMF denied the report.

Wall Street is looking to shake off last week's drubbing, said Karee Venema, analyst at Schaeffer's Investment Reach in Cincinnati, Ohio.

Rumors are swirling that Germany and France are in discussions to find additional ways to shore up the struggling euro zone, possibly through bailout fund insurance of bonds among various European countries.

Some analysts saw any gains mostly as a technical rebound as Wall Street came off its worst week in two months. The S&P 500 fell 4.7 percent, recording the worst weekly losses in two months. The Dow was off 4.8 percent for the week, and the Nasdaq fell 5.1 percent.

An oversold trading opportunity is likely pending this week given, short-term indicators are increasingly oversold, but the longer-term technical background is increasingly at risk, said Robert Sluymer, analyst at RBC Capital Markets in New York.

S&P 500 futures jumped 34.6 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 gained 275 points, and Nasdaq 100 futures added 53.5 points.

European stocks <.FTEU3> rose 3.1 percent on Monday, led by shares of financial institutions helped by renewed hopes about of an easing of the debt crisis.

U.S. President Barack Obama will press EU officials on Monday to reach a definitive solution to their sovereign debt crisis, which is emerging as a major 2012 U.S. election worry.

Also boosting the market's mood, a trade group said U.S. retailers racked up a record $52.4 billion in sales over the Thanksgiving weekend, a 16.4 percent jump from a year ago.

Shares of Best Buy Co Inc rose 5.7 percent to $27.10 in premarket trade. Shares of Wal-Mart Stores Inc was up 1.6 percent to $57.81.

Materials stocks were higher premarket as commodity prices rose. Freeport-McMoRan Copper & Gold Inc jumped 6.5 percent to $36.02, and Alcoa Inc rose 4.7 percent to $9.37.

The Commerce Department releases new home sales at 10 a.m. EST. Economists forecast a total of 315,000 annualized units, compared with 313,000 units in September.

(Reporting by Angela Moon; editing by Jeffrey Benkoe)