Wall Street equity futures were lower on Tuesday as a last-minute congressional deal to raise the U.S. debt ceiling failed to ease worries about a possible U.S. credit downgrade as questions lingered over the economy's strength.
Equities have been pressured recently over those concerns, with the S&P falling for a sixth straight day on Monday after stocks suffered their worst week in a year last week. A weak reading on manufacturing on Monday added to the pessimism.
While the congressional compromise, which includes spending cuts of $2.4 trillion over 10 years, was expected to avert a default, many investors feared it doesn't go far enough to satisfy rating agencies.
If the U.S. government's rating is downgraded, it could increase Treasury rates and raise the nation's borrowing costs.
The Senate was due to vote on the deal at noon EDT after passing the Republican-led U.S. House of Representatives on Monday.
A lot of people are very concerned about the potential for a downgrade, and there are also concerns about what the bill means for the overall economy and general concerns about the economy following yesterday's downer of a manufacturing number, said Robert Pavlik, chief market strategist at Banyan Partners LLC in New York. There are a lot of concerns out there right now.
S&P 500 futures fell 6,6 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 47 points, and Nasdaq 100 futures slid 11.5 points.
Reflecting economic concerns, September U.S. crude futures fell 0.5 percent, while gold, viewed as a safe haven for assets, rose 0.6 percent and traded within view of a new high.
Overseas debt issues returned to the forefront after French bank BNP Paribas SA
In U.S. company news, Pfizer Inc
Agricultural processor Archer Daniels Midland Co
Mobile service provider MetroPCS Communications Inc's
Overseas, Toyota Motor Corp
A senior executive at Sony Corp
U.S. stocks fell on Monday, with the S&P down for a sixth straight day, though the market pared losses late in the day.
(Editing by Jeffrey Benkoe)