Stock futures signaled Wall Street could hit fresh 12-year lows at the open on Monday as a lack of confidence in steps to shore up ailing banks persists, offsetting news of a $41 billion drug sector takeover.
Unease about the fate of major banks had stock markets sliding about 2 percent or more in Europe, extending a sell-off seen in Asia overnight.
Before the bell, shares of JPMorgan
What's dragging global markets across the board, it's financials. We're concerned about HSBC, Lloyds is getting hit, and AIG came out and warned its failure will cripple world banks, said Art Hogan, chief market analyst at Jefferies & Co in Boston. If you look at everything that's been done so far, there's been a lack of detail.
S&P 500 futures fell 8.80 points and were 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 slid 89 points, and Nasdaq 100 futures shed 8.25 points.
Merck & Co Inc
But optimism about the deal was overshadowed by worries about the fate of the world's banking system. In Britain, Lloyds Banking Group
American International Group Inc
In an interview on CNBC television, billionaire investor Warren Buffett said the current environment was an economic Pearl Harbor. But he added that over a 10-year period investors will do better owning group of equities.
Merck shares slipped 4.3 percent to $21.75 before the bell, but shares of Schering-Plough Corp jumped 18.8 percent to $20.95.
U.S. stocks mostly rose on Friday, with the Dow and S&P rebounding late in the day to end higher as surging oil prices lifted energy stocks, offsetting a selloff in technology shares due to fears the slowing economy will sap consumer spending.
(Editing by James Dalgleish)