Stock index futures pointed to a lower open on Wall Street on Monday, with futures for the S&P 500 down 0.7 percent, Dow Jones futures down 0.64 percent and Nasdaq 100 futures down 0.79 percent at 5:13 a.m. ET.
European stocks were down around 0.7 percent in morning trade, led lower by banks, on revived worries over debt-stricken Greece after a report said Germany was pushing for Athens to give up control over its budget policy to European institutions as part of discussions over the second bailout package. <.EU>
Italian government bonds came under pressure on Monday ahead of an auction of five and 10-year paper, while appetite for safe-haven assets underpinned German debt ahead of a European Union summit. Recently improved sentiment towards peripheral bonds is expected to support Italy's sale of up to 8 billion euros, despite a rating cut on Friday by Fitch and the fact that Greece has yet to finalize a debt swap deal with its private creditors.
EU leaders will sign off on a permanent rescue fund for the euro zone at a summit on Monday and are expected to agree on a balanced budget rule in national legislation, with unresolved problems in Greece casting a shadow on the discussions.
The summit, the 17th in two years as the EU battles to resolve its sovereign debt problems, is supposed to focus on creating jobs and growth, with leaders looking to shift the narrative away from politically unpopular budget austerity.
Swiss engineering group ABB
Standard & Poor's took negative ratings actions on three midsize brokerage firms on Friday, saying the European financial crisis could hurt their profitability for a prolonged period of time.
Bank of America Corp
U.S. stocks trimmed losses to end little changed on Friday, as investors saw dips in the market as an opportunity to buy into what has been a strong first month of 2012.
The Dow Jones industrial average <.DJI> was down 74.17 points, or 0.58 percent, at 12,660.46. The Standard & Poor's 500 Index <.SPX> was down 2.11 points, or 0.16 percent, at 1,316.32. The Nasdaq Composite Index <.IXIC> was up 11.27 points, or 0.40 percent, at 2,816.55.
(Reporting by Blaise Robinson, Editing by Mark Potter)