Stock futures point to higher open on M&A, retail sales

NEW YORK (Reuters) - Stock index futures pointed to a modestly higher open on Monday after a pair of proposed multibillion dollar acquisitions.

Coming off a steep selloff Friday, futures were also influenced by retail sales, up more than expected in October, as well as a weaker reading on New York manufacturing.

Caterpillar Inc agreed to buy mining equipment maker Bucyrus International Inc for $7.6 billion, sending Bucyrus' shares up 30 percent to $90.60 in premarket trading. Caterpillar, a Dow component, slid 1.5 percent to $79.85.

Other mining equipment companies gained on the deal. Terex Corp climbed 8.1 percent to $26.40 while Joy Global Inc advanced 6.7 percent to $77.21. Manitowoc Co Inc , which filed a shelf offering Friday, added 5.5 percent to $11.80.

In other M&A action, data storage equipment maker EMC Corp agreed to buy smaller peer Isilon Systems Inc for $2.25 billion, sending Isilon shares up 29 percent to $33.96 before the bell.

"Merger activity is definitely a nice thing to see, especially after the recent sharp pullback we've seen," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York. "And the fact that Caterpillar is paying cash shows that the company doesn't think its stock is undervalued."

Ireland didn't rule out the possibility it may have to turn to Europe for help in dealing with its debt crisis on Sunday but said no application had been made for assistance yet.

Concerns over euro zone sovereign debt has pressured equities in recent weeks along with persistent concerns that China may raise interest rates. Offsetting that was stronger-than-expected growth data from Japan for the July to September period.

Retail sales posted their largest gain in seven months, boosted by purchases of motor vehicles and building materials. Separately, a gauge of manufacturing in New York state fell in November to its lowest since April 2009.

"We were expecting decent news on the retail front, so while this is expected, it is reassuring going into the holiday shopping season," Kaufman said.

S&P 500 futures rose 5.3 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 added 25 points, and Nasdaq 100 futures were up 15.25 points.

The S&P 500 dipped below its 20-day moving average on Friday for the first time since September 1, but managed to close above it in a sign the level -- currently just above 1,194 -- could provide strong technical support.

Lowe's Cos Inc reported third-quarter profit that beat expectations by a penny, but sales missed estimates. Shares of the home improvement retailer were little changed before the bell.

The dollar index <.DXY> rose 0.3 percent, hitting a six-week high, lifted by higher U.S. Treasury yields. Crude oil rose 0.8 percent, recovering from heavy selling on Friday.

Also in deal news, BHP Billiton scrapped its $39 billion bid for Canada's Potash Corp on Sunday after regulators rejected the deal. U.S.-listed shares of Potash slid 0.8 percent to $138.75 in premarket trading.

Wall Street ended a five-week winning streak on Friday as the threat of rising interest rates in China prompted investors to book profits and reassess bullish positions in equities.

(Editing by Jeffrey Benkoe)

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