Stock index futures drop on worries from Japan disaster

By @ibtimes on

Stock index futures fell on Monday as investors worried about the impact of Japan's devastating earthquake and tsunami.

A second hydrogen explosion rocked a stricken nuclear power plant in Japan, sending authorities scrambling to avert a meltdown.

Japanese stocks fell 6.2 percent as investors expected the disaster to take an economic toll. Trading in other markets was cautious but steady. The pan-European FTSEurofirst 300 <.FTEU3> was off 0.6 percent.

The earthquake could have great implications on the global economic front, said Andre Bakhos, director of market analytics at Lek Securities in New York. If you shut down Japan, there could be a global recession.

Among companies expected to be affected the most were those with exposure to Japan and the nuclear industry. General Electric Co , which has combined nuclear ventures with Hitachi Ltd <6501.T> of Japan, fell 2.8 percent to $19.80.

The Market Vectors uranium and nuclear energy exchange traded fund fell 4 percent in premarket trade.

S&P 500 futures lost 7 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 54 points, and Nasdaq 100 futures dropped 13.5 points.

Japanese ports handling as much as 7 percent of the country's industrial output sustained major damage, disrupting global supply chains and causing billions of dollars in losses, industry officials said.

Japanese shares traded in New York also fell. Toyota Motor Co <7203.T>, which said it would suspend production at all its Japanese car plants, dropped 6 percent to $80.50. The iShares MSCI Japan index exchange traded fund fell 7.6 percent.

Brent crude touched a two-week low above $112, down 1.3 percent on concerns economic growth would slow after Japan's disaster, while easing unrest in the Middle East threw the focus back onto ample oil supplies.

In merger news, Warren Buffett's Berkshire Hathaway Inc agreed to buy lubricants maker Lubrizol Corp for $9 billion to tap rising demand for chemicals used to operate engines and machinery. Lubrizol soared 27 percent to $133.80 premarket.

(Editing by Jeffrey Benkoe)

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