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Futures Mixed After Rally; Growth Woes Weigh

U.S. stock index futures were narrowly mixed Monday following a sharp rally in the previous session as investors looked for direction in response to new initiatives agreed in Europe, while worries over weakness in China limited gains.

Last Friday, the S&P and Nasdaq logged their sharpest gains this year. And defying expectations for a "June swoon," the Dow logged its best June gain since 1997, while the S&P 500 and Nasdaq posted their strongest since 1999 and 2000, respectively.

Growing expectations that more measures will follow, including a rate cut by the ECB this week, sent shares higher in Europe, but a disappointing PMI report out of Chinakept gains in check.

“China is the big question mark. Let’s see if indeed they can get back on track…A lot of that is also going to depend on how quickly orders from the euro zone start to flow back into the Chinese books,” Jack Bouroudjian, CEO of Bull and Bear Partners in Chicago told CNBC.

On the economic front, the Institute for Supply Management’s June manufacturing index is out at 10 am ET. Economists in a Reuters survey expect a reading of 52.0 versus 53.5 in May.

Investors will also keep an eye on May construction spending, also due at 10 am ET.

Barclays Chairman Marcus Agius resigned following the Libor probe into interest-rate fixing that resulted in Barclays paying more than $450 million in fines.

On the M&A front, Dell announced it will buy Quest Software in a deal worth $2.4 billion, or $28 a share. Quest shares were briefly halted.

Amylin soared after Bristol-Myers Squibb announced it would buy Amylin for $31 per share or about $5.3 billion in cash. At least three brokerages raised their price target on Amylin.

And German industrial gas firm Linde plans to sell new shares to help fund its $4.6 billion acquisition of Lincare Holdings .

—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up This Week:

MONDAY: ISM mfg index, construction spending, Wal-Mart 50th anniversary
TUESDAY: Factory orders, auto sales; NYSE early close
WEDNESDAY: INDEPENDENCE DAY - Bond, equity markets closed
THURSDAY: Weekly mortgage apps, Challenger job-cut report, ADP employment report, ISM non-mfg index, oil inventories, chain-store sales
FRIDAY: Non-farm payrolls

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