Stock index futures pointed to a weak open on Monday as concerns grew about the state of Europe's finances as Greece and Germany sparred over budget measures for Athens.
Bank stocks led the way lower after a report that Germany was pushing for Greece to give up control over its budget policy to European institutions as part of discussions over a second bailout package.
The issues in Greece added to uncertainty ahead of a Monday summit where European Union leaders will sign off on a permanent rescue fund for the euro zone. The leaders are expected to agree on a balanced budget rule in national legislation.
Resolution for Greece is now up in the air, and that's causing some concern. We could give up the gains we've seen so far this month if there ends up being no progress, said Alan Lancz, president of investment advisory firm Alan B. Lancz & Associates Inc. in Toledo, Ohio.
While sentiment has improved over the euro zone lately, with the S&P 500 up 4.7 percent this month, many investors still view the region with caution as setbacks in solving its sovereign debt issues could hamper international economic growth and erode domestic bank profits.
U.S.-listed shares of Barclays Plc
Standard & Poor's late Friday issued negative ratings on three brokerage firms, including Jefferies Group Inc
S&P 500 futures fell 11.9 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 110 points and Nasdaq 100 futures sank 20.25 points.
Issues in Europe have taken a backseat to the focus on corporate earnings in recent weeks. By the end of last week, a majority of companies have topped analyst consensus expectations, though by a lower rate than previous quarters.
Shares of Pep Boys Manny, Moe and Jack
Swiss engineering group ABB
Bank of America Corp
U.S. consumer spending was flat in December as households took advantage of the largest rise in income in nine months to boost their savings, setting the tone for a slowdown in demand early in 2012.
U.S. stocks ended little changed on Friday as investors saw dips in the market as an opportunity to buy into what has been a strong first month of 2012.
(Editing by Padraic Cassidy)