U.S. stock index futures fell on Monday as Italy and Greece rushed to form technocrat-led governments in a bid to stave of the euro zone's debt crisis, and as data showed the region is facing a looming recession.

The euro fell against the dollar as initial optimism about prospects of crisis-fighting reforms under new governments in Italy and Greece gave way to caution over the huge debt problems still plaguing the single currency zone.

Industrial production in the euro zone fell in September, supporting expectations of a sharp contraction of industry and a probable economic recession. Output at factories in the 17-nation bloc fell 2.0 percent for the month.

What we have here is a market that still remains skeptical as to whether or not Italy's regrouping of its politics will be able to enhance the austerity program, said Peter Cardillo, chief market economist at Rockwell Global Capital. Remember that Italian politics can be quite surprising at times.

Stocks have traded choppily and in tandem with the euro recently in a sign U.S. investors are taking cues from the euro zone's mushrooming debt crisis as bouts of risk aversion are followed by periods of relative optimism.

S&P 500 futures fell 6.9 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures fell 42 points, while Nasdaq 100 futures lost 9.25 points.

Voicing the caution felt in the United States, investor Warren Buffett, chief executive of Berkshire Hathaway Inc , told CNBC it was not clear Europe has the ability to do whatever it takes to stop the crisis. He said it was too early to buy European sovereign debt or bank shares.

The president of Italy asked former European Commissioner Mario Monti on Sunday to form a government to restore market confidence in an economy whose debt burden is too big for the euro bloc to bail out.

In Greece, new Prime Minister Lucas Papademos, a former central banker who oversaw his country's entry to the euro zone in 2002, will have to win Wednesday's confidence vote in his cabinet before meeting euro zone finance ministers in Brussels on Thursday,

Tokyo's Nikkei <.N225> gained 1.1 percent after data showed Japan's economy expanded 1.5 percent in the third quarter, the fastest growth among major industrial nations, as the country bounced back from an earthquake-triggered recession.

European shares fell after an auction of up to 3 billion euros ($4.1 billion) of five-year Italian bonds failed to provide relief to investors. The FTSEurofirst <.FTEU3> fell 1.1 percent.

International Business Machines Corp rose 0.8 percent to $188.85 in premarket trade after Buffett told CNBC he bought shares of the company this year.

Morgan Stanley's Asia private equity arm is in talks to buy a majority stake in Chinese packaging firm HCP Holdings Inc, four sources with knowledge of the matter told Reuters, a deal that could value the company at about $500 million.

(Editing by Padraic Cassidy)

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