Stock futures higher on Caterpillar, M&A flurry

NEW YORK (Reuters) - U.S. stock index futures rose on Monday after a new flurry of merger-and-acquisition activity and CATERPILLAR (CAT.NY)reported stronger-than-expected quarterly profit.

Caterpillar Inc , the Dow component, rose 2.7 percent to $70.61 in premarket trading. The heavy machinery maker also raised its full-year forecast, saying "economic conditions are definitely improving.

Whirlpool Corp gained 7.6 percent to $109.98 premarket after it reported adjusted first-quarter earnings that beat estimates and raised its full-year profit view, a bullish sign for consumer spending.

On the merger front, Hertz Global Holdings Inc agreed to buy rival car rental company Dollar Thrifty Automotive Group Inc for about $1.2 billion, while Charles River Laboratories International , the U.S. clinical research company, plans to acquire WuXi PharmaTech Inc for $1.6 billion.

Dollar shares gained 4.2 percent to $40.50 premarket.

"Having multiple billion-dollar deals is a clear testament to the strength of the market," said Arthur Hogan, chief market analyst at Jefferies & Co in New York. "This is something we should get used to."

Also, U.S. investment bank Stifel Financial Corp will buy rival Thomas Weisel Partners Group Inc for about $300 million in stock.

S&P 500 futures rose 2 points and were slightly 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 27 points, while Nasdaq 100 futures added 1.75 points.

Citigroup Inc slipped nearly 1 percent to $4.82 after the U.S. Treasury said it was launching a plan to sell off a 7.7-billion-share stake in the bank.

Ahead of the first session since U.S. indexes hit a 19-month high, a Greek official said an aid package would help avert a sovereign debt default, though signs grew the package may have to be bigger. The situation in Greece has weighed on equities in recent weeks.

"It looks as though this issue will be resolved sooner rather than later, so even though there are questions it looks like a major overhang on the market will soon be behind us," Hogan said.

The two Democratic Senators trying to come up with a bill regulating the $450 trillion private swaps market are near a deal, and will include a provision to require banks to spin off swaps desks, sources said Sunday.

European stocks were up more than 1 percent Monday morning, led by banking shares, as worries eased over Greece's woes <.EU>. while Japan's Nikkei average <.N225> jumped 2.3 percent.

U.S. stocks hit a 19-month high Friday as Merck rose after it said costs from healthcare reform will be lower than its rivals.

(Editing by Jeffrey Benkoe)

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