Earnings, M&A Lift Dow Futures

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Strong earnings from heavy-machinery giant Caterpillar, and a round of mergers and acquisitions activity, lifted Dow futures modestly into the green. .

Today's Markets

As of 8:25 a.m. ET, Dow Jones Industrial Average futures rose 16 points to 11,772, S&P 500 futures dipped 0.5 point to 1,235, and Nasdaq 100 futures rose 3.5 points to 2,338.

Caterpillar (NYSE:CAT) posted third-quarter earnings of $1.71 a share, topping estimates of $1.54.  The world's biggest heavy-machinery manufacturer said its sales were $15.72 billion, also beating expectations of $15.03 billion.

Insurer Cigna (NYSE:CI) unveiled plans to acquire HealthSpring (NYSE:HS) for $3.8 billion -- a 37% premium to the managed care specialists' closing price on Friday. Also on the merger front, Oracle (NASDAQ:ORCL) said it plans on buying cloud-based customer service provider RightNow Technologies (NASDAQ:RNOW) for $1.5 billion, a 20% premium.

The Dow closed higher for the fourth-straight week last week, having soared close to 10% over the period, and pushing the blue-chip index into the green for the year.

Market participants have been paying close attention to euro zone, where leaders met this weekend in Brussels to work out a solution to the 17-member currency bloc's debt crisis. A final decision has been postponed to a second summit on Wednesday, however, reports suggest leaders made some progress.

"Further work is still needed and that is why we will take the decisions in the follow-up euro zone summit," Reuters quoted European Council President Herman Van Rompuy as saying after the summit.

The new package to tackle the crisis will involve recapitalzing the region's struggling banking sector, restructuring Greece's sovereign debt, and a significant increase in the size of the rescue fund, called the European Financial Stability Facility, according to the Wall Street Journal.  However, disagreements reportedly remained on how to leverage the EFSF, and other specifics.

While market participants were generally optimistic a solution will ultimately be crafted, European summits have had mixed results in the past presenting a risk to already volatile markets.

"We recommend staying cautious until more concrete policy announcements emerge," analysts at Barclays Capital wrote in a a research note.

European blue chips fell 0.47%, while the euro fell 0.12% to $1.38.  The dollar rose 0.12% against a basket of world currencies.

There are no major American economic releases slated for release on Monday, however, traders did get encouraging manufacturing data from China.  HSBC's gauge of Chinese manufacturing rose to 51.1 in October from 49.9 in September, marking the first rise since March.  Readings above 50 point to expansion, while those below indicate contraction.

However, data from Europe showed that manufacturing there contracted more than expected over the same period.

Energy markets were in the green.  Light, sweet crude rose 41 cents, or 0.47%, to $87.81 a barrel.  Wholesale RBOB gasoline rose 2 cents, or 0.61%, to $2.70 a gallon.

Gold jumped $20.50, or 1.3%, to $1,657 a troy ounce.  Treasury yields edged lower.  The benchmark 10-year note yielded 2.194% from 2.219%.

Foreign Markets

The Euro Stoxx 50 fell 0.47% to 2,327, the English FTSE 100 rose 0.07% to 5,392 and the German DAX slipped 0.45% to 5,944.

In Asia, the Japanese Nikkei 225 jumped 1.9% to 8,844 and the Chinese Hang Seng spiked 4.1% to 18,772.