Futures on benchmark U.S. stock market indexes fell before Wall Street's opening on Monday, with the focus on Citigroup after news of CEO Charles Prince's resignation.
At 4:30 a.m. EST, the Dow Jones future was down 0.6 percent, the S&P 500 future was 0.7 percent lower and the Nasdaq future was 0.6 percent in the red.
The indicative Dow Jones index, which tracks how the Dow stocks are traded in Frankfurt, was 0.4 percent lower.
Citigroup said it may write off $11 billion of subprime mortgage losses on top of a $6.5 billion write-down last quarter.
Citigroup shares, however, rose 5 percent in their debut in Tokyo (8710.T: Quote, Profile, Research) on Monday and were trading 4.2 percent higher in Frankfurt by 4:30 a.m. EST.
CEO Prince stepped down five days after Merrill Lynch ousted its chief executive, Stanley O'Neal, following a $8.4 billion write-down that was more than 50 percent higher than the bank had forecast.
With further write-downs likely from key financial institutions and growing worries about corporate earning prospects helping to depress equities, the outlook for activity continues to deteriorate, ING said in a note.
That was echoed by ABN AMRO, which said, Renewed credit market problems could impede business investment and undermine the stock market.
Five S&P 500 companies are scheduled to report quarterly earnings, including Sun Microsystems, whose earnings per share are expected at $0.03, up from $0.01 a year earlier, according to Reuters Estimates.
The day's U.S. economic data highlight is the Institute for Supply Management's non-manufacturing index for October. Economists polled by Reuters forecast a reading of 54.0, down from 54.8 in September.
With the housing market downturn still intense, and consumer spending set to downshift in response to a purchasing power squeeze from higher gasoline prices and the tightening in credit market conditions, the stage is set for much weaker growth this quarter, JPMorgan said in a note.
This slowdown once again will test the economy's resilience. However, if the expansion is to be in jeopardy, it will come through a broad-based corporate retrenchment. A significant pullback in hiring and the work week would quickly undermine labor income and household spending. And the effect likely would be magnified by a fall in equity prices, it said.
Goldman Sachs said forward-looking economic indicators pointed towards slower spending and a weaker employment market in coming months.
We continue to believe that the economic data over the next several weeks will be disappointing enough to prompt another rate cut at the December FOMC meeting, Goldman Sachs said, referring to the U.S. central bank's monetary policy setting committee.
The Fed's 50 basis-point rate cut on September 18 triggered a three-week rally in equities markets but last week's 1/4 point reduction helped lift U.S. indexes for only one day.
Fed board member Frederic Mishkin is scheduled to speak at 9:00 a.m. EST on Financial Instability and Monetary Policy and Randall Kroszner, another Fed board member, is due to speak on Mortgage Lending Environment and Federal Reserve at 1:00 p.m. EST.
On Friday, the Dow Jones industrial average edged up 0.2 percent, the S&P 500 was up 0.08 percent and the Nasdaq Composite rose 0.56 percent.