NEW YORK - Stock index futures tumbled on Tuesday on concern that the recession is worsening and that efforts to stabilize the global financial system may not be enough.

The diminishing appetite for riskier assets made stocks sink in Asia overnight while in Europe benchmark indexes were down more than 2 percent.

Top drags before the bell included financials, with shares of Bank of America down 6 percent to $5.24 and JPMorgan off 4.4 percent to $23.60. Among big manufacturers, shares of Caterpillar Inc declined more than 2 percent.

Wal-Mart Stores Inc , up 1.4 percent to $47.20 before the bell, was the bright spot after the retailer posted a quarterly profit that beat Wall Street expectations, but its boost was eclipsed by signs that the recession is worsening and fears that the U.S. economic stimulus won't be a quick fix.

There's just an absence of good news, said Rick Meckler, president of investment firm LibertyView Capital Management in New York. I won't be surprised to see the market come down and test the lows of late last year.

S&P 500 futures fell 14.00 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 declined 139 points, and Nasdaq 100 futures were off 23.75 points.

U.S. President Barack Obama is due to sign a $787 billion economic stimulus bill into law on Tuesday, but investors worried that the measure would not help soften the impact of the 14-month-old recession soon enough. The White House hopes the package will save or create 3.5 million jobs.

The reality is setting in now that this is not a quick fix, said Meckler. The package, whilst impressive in its scope, is going to take a long time to be implemented and as that is happening there are a lot of businesses that are in some very difficult positions already.

A precipitous slide on Wall Street, a day after the Presidents Day holiday, would put U.S. stocks on the cusp of retesting an 11-year low hit on November 21.

The benchmark S&P 500 <.SPX> started 2009 up more than 20 percent from that bear market low, but through Friday's close it had since halved those gains.

Data on Monday showed Japan's economy shrank 3.3 percent in the fourth quarter, its worst quarter since the 1974 oil crisis, while a Reuters poll on Tuesday showed confidence among Japanese manufacturers stayed near record lows. The United States is Japan's biggest export market.

(Editing by James Dalgleish)

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