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Stock futures up, Treasuries futures slip as Syria fears ebb

Traders work on the floor of the New York Stock Exchange August 28, 2013. REUTERS/Brendan McDermid

NEW YORK (Reuters) - U.S. stock index futures rose on Monday and Treasuries futures slipped as worries about an imminent Western military strike against Syria ebbed.

Investors proved reluctant to buy riskier assets last week on fears the United States and other nations might hit at Syria to punish that country's government for the use of chemical weapons.

The geopolitical uncertainty contributed to steep losses in August, which marked the worst month for the S&P 500 (.SPX) since May 2012. Yields for benchmark 10-year U.S. Treasuries retreated from two-year highs, as well, fueled by a safety bid.

But with U.S. President Barack Obama this weekend saying he would seek congressional approval before a strike, therefore delaying any potential action, some measure of risk appetite returned.

"Currently there's a bit of a relief trade at play as the Syrian situation has been put on hold at least for the next week or so as congressional approval for action is sought," said Ian Lyngen, senior government bond strategist at CRT Capital Group LLC in Stamford, Connecticut.

"The situation is in a bit of a holding pattern until then," he added.

S&P 500 futures rose 16.5 points. Dow Jones industrial average futures added 117 points and Nasdaq 100 futures rose 35.5 points.

Prices for U.S. 10-year Treasuries futures also slipped, suggesting yields on benchmark U.S. government debt could resume their climb soon.

U.S. markets are closed on Monday for the Labor Day holiday, but futures on U.S. assets continued to trade.

(Reporting by Luciana Lopez; Editing by Andrea Ricci)