US STOCKS-Futures rise as investors eye Fed meeting

* BP permanently seals oil well in Gulf of Mexico

* Federal Reserve decision on monetary policy eyed

* Lennar shrs jump on quarterly results

* Futures up: S&P 5.7 pts, Dow 41 pts, Nasdaq 8 pts

* For up-to-the-minute market news see [STXNEWS/US] (Adds quote, byline, Lennar results in last paragraph, updates prices)

By Angela Moon

NEW YORK, Sept 20 (Reuters) - U.S. stock index futures rose on Monday, looking to extend Wall Street's three weeks of gains as investors awaited the Federal Reserve's monetary meeting later in the week.

Futures were supported by a jump in in BP Plc after the British oil major said it permanently sealed the oil well in the Gulf of Mexico that had led to the disastrous oil spill. U.S.-listed shares of BP rose 1 percent to $38.40. For details, see [ID:nLDE68J02F]

The Federal Reserve is expected to tread water at a policy-setting meeting on Tuesday, with economists looking for a renewed promise to keep its portfolio from shrinking but no new steps to ease monetary policy.

The lack of action, however, should not be mistaken for a lack of debate. Policymakers need to decide if and when to launch further large-scale asset purchases to support the sluggish recovery. [ID:nSGE68J04M]

"Whether or not the Fed is going to increase quantitative easing going forward will be the key in the next day or two," said Peter Cardillo, chief market economist at Avalon Partners in New York.

"The Fed will probably keep its policy on hold, and that might send a positive message to the market that the economy is not weakening anymore," he said.

On the M&A front, France's Safran SA unveiled a $1.1 billion deal to buy L-1 Identity Solutions Inc and its core biometric identity business. Separately, L-1 will sell its government consulting unit to BAE Systems Plc for nearly $300 million. L-1 Identity was up 20 percent at $11.63 in premarket trade. [ID:nLDE68I0KJ]

Media and entertainment stocks will be eyed after sources told Reuters Indian conglomerate Sahara India Pariwar was in talks to buy the debt of struggling film studio Metro-Goldwyn-Mayer Inc [MGMYR.UL] for $1.5 billion to $2 billion [ID:nN18209065]

S&P 500 futures rose 5.7 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 added 41 points, and Nasdaq 100 futures gained 8 points.

Wall Street ended Friday rising for the third straight week.

Bank of America Corp plans to test different pricing packages in a bid to recover some of the $4.3 billion in revenue it expects to lose from new restrictions on bank and credit card fees, the Financial Times reported.

China Unicom Ltd <0762.HK> will launch Apple Inc's latest iPhone in China next Saturday, in a bid to claw back market share with the popular smartphones.

European stocks climbed 0.6 percent in early trade, rising for the first time in five sessions, led by energy and mining shares such as BP, Total SA and Rio Tinto Ltd .

On the earnings front, investors awaited results from Discover Financial Services , while on the macroeconomic front, the National Association of Home Builders/Wells Fargo monthly housing market index will be released at 10 a.m. EDT(1400 GMT). Economists in a Reuters survey expect a reading of 14 for September versus 13 in August.

Lennar Corp , the No. 3 U.S. homebuilder, posted a better-than-expected third-quarter profit as deliveries jumped, sending its shares up 5.7 percent to $14.78 premarket. [ID:nSGE68J0F2] (Reporting by Angela Moon; editing by Jeffrey Benkoe)