U.S. stock index futures fell sharply on Monday as fears of a credit rating downgrade of French banks and the lack of a solution to Greece's debt problem heightened concerns about the euro zone's debt crisis.
France's top banks are bracing themselves for a likely credit rating downgrade from Moody's, sources close to the situation said on Saturday, further complicating their efforts to assure investors they are riding out the tensions in funding markets.
Several sources said BNP Paribas
Adding to the gloom was the failure of the weekend's meeting of finance ministers from the Group of Seven industrialized nations to come up with any fresh proposals for boosting global growth.
Greece on Sunday slapped a new tax on real estate to plug a 2011 budget hole, please international lenders and secure a key new loan tranche as concerns mounted in Europe over its euro zone membership.
The European sovereign debt issue is increasingly becoming a concern... Without any data today to brush off some of the issues, the market is entirely focused on this, said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
S&P 500 futures fell 21.6 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 fell 160 points, and Nasdaq 100 futures dropped 36.5 points.
U.S. stocks closed lower on Friday, rattled by the resignation of Juergen Stark, a member of the European Central Bank's executive board and governing council, which added to concerns about policymakers' ability to deal with Europe's debt crisis.
The U.S. Federal Reserve has quizzed Capital One Financial Corp
The newspaper also said Amazon.com Inc
European stocks slumped, led by banking stocks, while Japan's Nikkei average <.N225> dropped to a fresh 2-1/2 year closing low.
(Editing by Padraic Cassidy)