Stock index futures pointed to a drop of about one percent on Monday as growing concerns about heavy debt loads both domestically and abroad added more uncertainty to a troubled market.

A U.S. congressional committee was expected to concede defeat in its bid to lower the deficit, renewing the debate over taxes and spending at a time when the impending expiration of payroll tax breaks and jobless benefits could undermine the economy.

In addition, Moody's said a recent rise in interest rates on French government debt and weaker economic growth prospects could be negative for the country's credit rating.

The committee's co-chairs will issue a statement later Monday, according to sources, declaring the bipartisan committee was unable to reach a deficit-reduction deal because of deep divides over taxes and spending.

The developments create further headwinds for an already volatile market, and could extend the previous week's losses, which was the worst for the S&P in two months.

In Europe, the FTSEurofirst 300 index fell 2.1 percent. In addition to the new concerns about France, Spanish prime minister-elect Mariano Rajoy was under pressure to details his policies to overcome a severe economic crisis after his center-right party won the country's biggest election victory in 30 years.

Adding to market jitters, Chinese Vice Premier Wang Qishan warned the global economy was in a grim state.

It isn't just the failure of the committee that's causing investors to shun risk around the world, although I thought we would get some kind of last-minute deal, said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Between the continued concerns about Europe, especially France now, and the comments out of China, there are just so many ongoing problems.

S&P 500 futures fell 17.8 points and were below 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 lost 154 points and Nasdaq 100 futures sank 23.25 points.

Trading volume is expected to be light this week due to the U.S. Thanksgiving holiday on Thursday. The light action could add to market volatility.

The S&P failed to rise above 1,225 on Friday after a drop below it on Thursday triggered massive selling, and that level is now strengthening as technical resistance. Last week, the Dow fell 2.9 percent, the S&P dropped 3.8 percent, and the Nasdaq lost 4 percent.

Pharmasset Inc. surged 86 percent to $135.05 in premarket trading after Gilead Sciences Inc. agreed to buy the company for $11 billion in cash. Gilead fell 6.5 percent to $37.30 before the bell.

Also in merger news, Alleghany Corp will buy Transatlantic Holdings Inc for about $3.4 billion, sending Transatlantic shares up 4.5 percent to $56.90 before the bell.

October existing home sales will be released at 10 a.m. EST (1500 GMT) and are seen falling modestly to 4.8 million units from 4.91 million in the previous month.

(Editing by Jeffrey Benkoe)