Stock index futures tumbled on Thursday as a grim outlook from the Federal Reserve and downbeat data on private sector business activity in Europe and China stoked fears the global economy could sink back into recession.

Wall Street suffered its worst selloff in a month on Wednesday on worries about the health of the economy after the Fed said there were significant downside risks.

Adding to worries, data showed China's manufacturing sector contracted for a third straight month in September. The world's second-biggest economy is vulnerable to fading demand from the United States and Europe, its biggest export markets.

The Fed launched a plan to lower long-term borrowing costs and bolster the housing market on Wednesday, saying it will sell $400 billion of short-term Treasury bonds to buy the same amount of longer-term U.S. government debt.

S&P 500 futures fell 27.5 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 slid 246 points, and Nasdaq 100 futures dropped 55.25 points.

Investors will watch the two-day Group of 20 meeting in Washington for any further policy response in tackling the global slowdown and euro zone debt crisis.

Investors also awaited U.S. weekly jobless claims at 8:30 a.m. EDT and the Federal Housing Finance Agency Home Price Index for July at 10 a.m. EDT (1400 GMT)

United Technologies Corp is acquiring aircraft components maker Goodrich Corp in a $16.5 billion cash deal. It would be the largest deal since 2000.

In an abrupt shift in strategy, the United Auto Workers union has focused its contract negotiations on Ford Motor Co after talks stalled with Chrysler.

FedEx Corp reported quarterly results early Thursday.

Bank of America Corp shook up its Merrill Lynch unit, eliminating more than a half of the firm's regional manager jobs.

Exxon Mobil Corp might receive much less compensation than the U.S. oil giant wanted from Venezuela for the nationalization of its assets in 2007.

Wall Street stocks suffered their worst drop in a month after the Fed's announcement, with the Dow Jones industrial average <.DJI> dropping 2.5 percent, the Standard & Poor's 500 Index <.SPX> losing 2.9 percent and the Nasdaq Composite Index <.IXIC> falling 2 percent.

(Reporting by Angela Moon; editing by Jeffrey Benkoe)