U.S. stock index futures pointed to a flat open on Monday as Italy and Greece rushed to form technocrat-led governments in a bid to stave of the euro zone's debt crisis, and as data showed the region is facing a looming recession.

The euro fell against the dollar as initial optimism about prospects of crisis-fighting reforms under new governments in Italy and Greece gave way to caution over the huge debt problems still plaguing the single currency zone.

Last week the markets chose to treat the glass as half full in interpreting the retirement of the regimes in Greece and Italy as positive, but it did nothing to cure the underlying issues, said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Industrial production in the euro zone fell in September, the most since early 2009, supporting expectations of a sharp contraction of industry and a probable economic recession. Output at factories in the 17-nation bloc fell 2.0 percent for the month. [ID:nL5E7ME1RE]

It is confirming directionally what investors hold as their belief, which is that Europe is either in or moving quickly toward what is likely recession, Luschini said.

Stocks have traded choppily and in tandem with the euro recently in a sign U.S. investors are taking cues from the euro zone's mushrooming debt crisis as bouts of risk aversion are followed by periods of relative optimism.

S&P 500 futures SPc1 fell 3 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures DJc1 up 6 points, while Nasdaq 100 futures NDc1 up 0.5 points.

Voicing the caution felt in the United States, investor Warren Buffett, chief executive of Berkshire Hathaway Inc (BRKa.N), told CNBC it was not clear Europe has the ability to do whatever it takes to stop the crisis. He said it was too early to buy European sovereign debt or bank shares.

The president of Italy asked former European Commissioner Mario Monti on Sunday to form a government to restore market confidence in an economy whose debt burden is too big for the euro bloc to bail out. [ID:nL5E7MD0LU]

What we have here is a market that still remains skeptical as to whether or not Italy's regrouping of its politics will be able to enhance the austerity program, said Peter Cardillo, chief market economist at Rockwell Global Capital. Remember that Italian politics can be quite surprising at times.

In Greece, new Prime Minister Lucas Papademos, a former central banker who oversaw his country's entry to the euro zone in 2002, will have to win Wednesday's confidence vote in his cabinet before meeting euro zone finance ministers in Brussels on Thursday.

European shares fell after an auction of up to 3 billion euros ($4.1 billion) of five-year Italian bonds failed to provide relief to investors. The FTSEurofirst .FTEU3 fell 0.7 percent.

J.C. Penney Co Inc (JCP.N) reported a quarterly loss after same-store sales and gross margin shrank, and the department store operator forecast flat same-store sales for the holiday quarter. The shares fell 2 percent to $33.23.

Boeing Co (BA.N) shares looked set to boost the Dow after the U.S. planemaker announced an order worth at least $18 billion and said the Middle East will need to recruit and train tens of thousands of new pilots to sustain a massive expansion in long-haul fleets. The share rose 3 percent to $68.94 [ID:nWEA3011]

International Business Machines Corp (IBM.N) rose 1.1 percent to $189.44 in premarket trade after Buffett told CNBC he bought shares of the company this year.