US STOCKS-Futures jump, Microsoft proposes to buy Yahoo

NEW YORK, Feb 1 (Reuters) - U.S. stock index futures jumped on Friday, with Nasdaq futures reversing losses, after software company Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz) proposed an acquisition of Web media company Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz).

S&P 500 futures SPc1 were up 11 points, above fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures DJc1 were up 121 points. Nasdaq 100 NDc1 futures were up 15 points.

S&P futures were up only about 3 points before the news, while Dow futures were up about 50 points and Nasdaq futures were lower. (Reporting by Caroline Valetkevitch; Editing by Kenneth Barry)