Index futures edge higher after M&A flurry

NEW YORK (Reuters) - U.S. stock index futures edged higher on Monday following four weeks of gains for Wall Street as investors eyed a flurry of merger-and-acquisition deals, a sign that companies are seeing value in the market.

However gains were capped as concerns resurfaced over euro zone countries after credit agency Moody's slashed its rating on Anglo Irish Bank's lower-grade debt, a move that pressured the euro and lifted German bunds.

Wal-Mart Stores Inc , the world's largest retailer, offered more than $4 billion for Massmart, South Africa's third largest retailer by value, as it seeks to expand in Africa.

Consumer goods giant Unilever Plc agreed to buy Alberto Culver Co , the U.S. hair care group, for $3.7 billion in cash. Alberto Culver shares rose 18.3 percent to $37.25 in premarket trading.

U.S. stocks have moved higher in the last four weeks, with the benchmark S&P 500 index up over 9 percent since the start of September as investors welcomed signs the economy may avoid a double-dip recession.

Peter Boockvar, equity strategist at Miller Tabak & Co, said investors were still caught between concerns over the economy and anticipation the Fed could pump more money into the economy, which would keep interest rates low and encourage more equities investing.

"The market is still in this tug of war between a lackluster economy on one hand and the Fed's printing press on the other," he said.

S&P 500 futures rose 1 point and were above below 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 17 points, and Nasdaq 100 futures added 3.5 points.

Shares of AirTran holdings Inc rose 55.2 percent to $7.06 premarket after Southwest Airlines Co said it would acquire the regional carrier in a deal valued at $7.69 per share.

French drugmaker Sanofi-Aventis is seeking to line up more funding to raise its $18.5 billion bid for Genzyme Corp , The Wall Street Journal reported. The shares rose 1 percent to $72.35 premarket.

Preorders in China for Apple Inc's iPhone 4 have exceeded 200,000 units since the smartphone went on sale Saturday, China Unicom said. Apple's shares added 0.8 percent to $294.86.

European stocks were flat on Monday, extending Friday's sharp gains, with food and beverages shares among the top gainers after the Unilever-Alberto Culver deal. The Nikkei 225 index closed up 1.4 percent.

U.S. stocks notched their fourth week of gains on Friday as investors used a rise in business spending to revive the September rally after three days of losses.

The next resistance on the S&P 500 it at around 1,173, the highest level since May 6, when it lost nearly 100 points intraday during the "flash crash." The index closed up 2.1 percent at 1148.67 on Friday.

(Reporting by Edward Krudy; editing by Jeffrey Benkoe)

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