Stock index futures fell on Tuesday due to renewed global credit concerns and caution ahead of reports on home prices and consumer confidence.

Banking stocks took an early beating after MarketWatch reported that Merrill Lynch had downgraded to neutral from buy investment banks Bear Stearns Cos., Lehman Brothers and Citigroup.

In Europe, losses among banking stocks also led declines, extending a global equity drop seen overnight in Asia.

The sell-off among European banks followed a Financial Times report saying Britain's Barclays Plc had been left with several hundred million dollars exposure to failed debt vehicles structured by its investment banking arm.

Barclays, whose stock tumbled nearly 3 percent in Europe, denied the report.

The excuse for the pullback is credit worries, said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey. There's a growing feeling that the worst is not over, that there would be another round of revelations and that is causing a lot of defensive posturing.

S&P 500 futures fell 4.9 points, below fair value, a formula to evaluate pricing taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures shed 46 points, and Nasdaq 100 futures fell 6.25 points.

Shares of Citigroup dropped 1.7 percent to $46.99 in electronic trading before the opening bell, while shares of Bear Stearns slid 2 percent to $110.05. Lehman Brothers shed 3 percent to $56.

Shares of State Street Corp., the world's largest institutional money manager, fell 4.5 percent to $61 in electronic trading before the open after The Times of Britain reported that the company faces $22 billion exposure to asset-backed commercial paper conduits.

The instruments are packages of retail and commercial loans financed by short-term debt raised in the commercial paper market, which in recent days has been buffeted by a credit squeeze.

In economic news, investors will scrutinize the S&P/Case Shiller Home Price Index due at 9 a.m. EDT for clues about weakness in housing.

The Conference Board will release its reading on consumer confidence for August at 10 a.m. EDT, with the market looking for signs that demand could be hurt by worries over falling home and stock prices.

The Fed's Open Market Committee is due to release the minutes of its August 7 policy-setting meeting at 2 p.m. EDT.

Investors will be eager to see the Fed's thinking before it cut the rate at which it lends to banks on August 17 in a move to stabilize credit markets.