US STOCKS-Futures up on commodities, M&A

* Chevron deal lifts energy sector

* Euro erases losses, commodities firm

* Futures up: S&P 1.9 pts, Dow 26 pts, Nasdaq 7.5 pts

* For up-to-the-minute market news see [STXNEWS/US]

NEW YORK, Nov 9 (Reuters) - U.S. stock index futures edged higher on Tuesday as the euro erased losses against the dollar and commodity prices rose, while a Chevron deal to buy a company to grab a stake in the fast-growing Marcellus shale fields lifted the energy sector.

Shares in Atlas Energy Inc jumped 36 percent to $43.03 in premarket trade after Chevron Corp said it will buy the U.S. natural gas producer for $4.3 billion. News of the deal lifted other energy companies. Cabot Oil & Gas Corp rose 6 percent to $34.50. For details, see [ID:nN09162177]

Yahoo Inc jumped 5 percent to $17.29 premarket after a report it may be a takeout target. Jack Ma, founder of Alibaba Group, has been approached by a group of private equity investors to gauge his interest in taking part in a bid to buy Yahoo, a source said. [ID:nTOE6A806O]

"The real drivers in the market place going forward are the kind of chatter that comes up about M&A," said Arthur Hogan, chief market analyst at Jefferies & Co in Boston.

Although looking to extend a recent rally, the S&P 500 faces resistance around 1,228, which would retrace 61.8 percent of the decline between its highs in 2007 and the 12-year low in March 2009. This is one of the Fibonacci retracements that chartists follow and can coincide with buying or selling markers. The index closed at 1223.25 on Monday.

S&P 500 futures rose 1.9 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 gained 26 points, and Nasdaq 100 futures added 7.5 points.

The weaker dollar lifted commodities. U.S. crude oil futures hit a two-year high, helped by bullish comments from an industry body, while copper reached its highest since mid-2008, also driven by falling inventories and supply concerns.

"I definitely think we are going to have commodities performing well if the dollar stays under pressure," said David Lutz, managing director of trading at Stifel Nicolaus Capital Markets in Baltimore.

Freeport-McMoRan Copper & Gold Inc rose 2 percent to $107.35, while Alcoa Inc , the biggest U.S. aluminum producer, rose 0.9 percent $14.08.

Dean Foods Co fell 11 percent to $9.21 after the company said recent "price concessions ... will continue to impact year-over-year comparisons into 2011." Also, its chief financial officer will resign.

The U.S. Federal Reserve's attempt to spur the economy by buying $600 billion in Treasury debt has helped commodity prices and led stocks to rally over the last two months. Equities have also developed a close inverse relationship with the dollar. For a Q&A on that relationship, see [ID:nN2199257]

China signaled its intention on Tuesday to drain excess cash from its financial system by unexpectedly raising the yield on bills at a central bank auction and announcing new rules to curb hot money inflows.

Wall Street retreated from a two-year high on Monday, weighed down by financial stocks and a stronger dollar. (Reporting by Edward Krudy; editing by Jeffrey Benkoe)