US STOCKS-Nasdaq futures jump, Merck keeps Dow, S&P 500 subdued

* Merck falls after ending COVID-19 vaccine program
* Investors optimistic about mega-cap company earnings
* GameStop shares surge in short-squeeze
* Futures: Dow down 0.40%, S&P 500 up 0.15%, Nasdaq up 1.02%

(Adds comments, updates prices throughout)
By Devik Jain and Shreyashi Sanyal
Jan 25 (Reuters) - Nasdaq futures jumped on Monday as
markets geared up for a busy week of earnings from mega-cap
technology firms, while Dow and S&P 500 futures came under
pressure from a decline in Merck's shares after the drugmaker
ended its COVID-19 vaccine program.
The so-called "stay-at-home" winners including Microsoft
Corp MSFT.O , Facebook Inc FB.O and Apple Inc AAPL.O rose
between 1.5% and 2.9% in premarket trading, as investors were
optimistic of their earnings reports following upbeat results
from Netflix Inc NFLX.O last week.
Microsoft, scheduled to report results on Tuesday, rose 1.5%
as Wedbush raised its price target on the software maker's stock
on expectations of further growth in its cloud business for
2021. Tesla Inc TSLA.O rose 1.2% ahead of it quarterly results
on Wednesday.
"All eyes are on tech as it now has a chance to resume some
of the strength that it lost in recent months," said Thomas
Hayes, chairman of Great Hill Capital in New York.
Investors also hoped officials in President Joe Biden's
administration could head off Republican concerns that his $1.9
trillion pandemic relief proposal was too expensive, even as
lawmakers from both parties agreed that getting the COVID-19
vaccine to Americans should be a priority. "We're focused on two things this week, whether big-tech can
deliver, which we are pretty optimistic about, and whether
Congress can move ahead with the stimulus package that the
market is anticipating," Hayes said.
Wall Street's main indexes touched record highs last week on
hopes of a full economic reopening and efficient distribution of
vaccines across the country, that is suffering more than 175,000
new cases a day with millions out of work.
Meanwhile, Dow e-minis 1YMcv1 fell and futures for the S&P
500 EScv1 traded in a tight range following news that Merck &
Co Inc MRK.N would stop development of its two COVID-19
vaccines citing inferior immune responses. The drugmaker's
shares fell 1%. At 8:20 a.m. ET, Dow e-minis 1YMcv1 were down 123 points,
or 0.4%, S&P 500 e-minis EScv1 were up 5.75 points, or 0.15%,
and Nasdaq 100 e-minis NQcv1 were up 135.75 points, or 1.02%.
With pricey stock market valuations, investors are keeping
an eye out for corporate forecasts to justify it, given the
expectation of an economic rebound this year. Earnings are
expected to rise 23.7% this year after falling 14.1% in 2020,
according to Refinitiv.
Advanced Micro Devices Inc AMD.O added 1.5% after RBC
raised its price target on the chipmaker's shares. Videogame retailer GameStop Corp GME.N surged 48.5%, after
having already gained about 250% since the beginning of 2021.
Traders noted that the jump in shares could be short-sellers
quickly buying back into the stock to cover potential losses and
retail investors piling in to benefit from the surge.