U.S. stock index futures pointed to a flat to higher open on Wall Street on Monday following the Christmas break, with futures for the S&P 500 up 0.07 percent, Dow Jones futures flat and Nasdaq 100 futures up 0.27 percent at 4.17 a.m. ET.

Airline stocks will be in the spotlight on Monday. The United States tightened airline security amid growing questions about how a Nigerian man with alleged ties to militants smuggled explosives aboard a transatlantic flight and attempted to blow it up.

U.S. retailers posted a better performance during the 2009 holiday shopping season, with sales as tracked by MasterCard Advisors unit SpendingPulse up 3.6 percent.

Kraft will be in focus as Italian chocolate major Ferrero is still examining its options on a possible bid for Britain's Cadbury PLC . The UK confectioner has rejected a $16.2 billion offer from Kraft. U.S.-based Hershey Co and the unlisted family-owned Ferrero have said they were contemplating bids.

Commodity prices were on the rise, with oil hitting a four-week high above $78 a barrel on Monday as colder weather across the United States and signs of an economic recovery helped boost the outlook for fuel demand, while Shanghai copper rose to a 16-month high on Monday.

Japan's Nikkei average gained 1.3 percent, hitting its highest close in four months as stronger-than-forecast output data boosted manufacturers, while European stocks were up 0.4 percent in morning trade following the Christmas break, but volumes were expected to be thin as London markets remained closed.

U.S. stocks rallied in a brief pre-holiday session on Thursday, closing at 2009 highs, after data showing a drop in initial jobless claims and growth in durable goods orders suggested an economic recovery was picking up steam.

The Dow Jones industrial average gained 53.66 points, or 0.51 percent, to end at 10,520.10. The Standard & Poor's 500 Index gained 5.89 points, or 0.53 percent, to finish at 1,126.48. The Nasdaq Composite Index rose 16.05 points, or 0.71 percent, to close at 2,285.69.

The S&P 500 is on track to record a gain of 25 percent in 2009.

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