U.S. stock index futures dropped late on Thursday after the Federal Reserve raised the discount rate that it charges banks for emergency loans.

* S&P 500 futures fell 7.20 points, while Nasdaq futures lost 10.8 points, and Dow futures slid 51 points.

* The Fed, citing improvement in financial market conditions, said the discount rate would be increased to 0.75 percent from 0.50 percent, effective Friday.

* The Fed's move marked a possible drawing down of the liquidity that has propelled markets as the Fed pushed ahead with efforts to revive the economy.

(Reporting by Ellis Mnyandu; Editing by Kenneth Barry)