Wall Street was set to fall more than 1 percent at the open on Friday after data showed U.S. employment growth ground to a halt in August, adding to worries about the health of the economy.
Nonfarm payrolls generated no new jobs last month as sagging consumer confidence discouraged already skittish U.S. businesses from hiring and kept pressure on the U.S. Federal Reserve to provide more monetary stimulus to aid the economy.
U.S. stock index futures were already off earlier in the morning as confirmation that Greece will miss its 2011 deficit target and uncertainty over Italy's commitment to austerity measures prompted investors to shy away from riskier assets.
There is a plethora of bad news. There are a lot of confidence issues in the marketplace. The jobs number only made things worse, said Sal Arnuk, co-manager of trading at Themis Trading in Chatham, New Jersey.
S&P 500 futures lost 18.9 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 tumbled 151 points, and Nasdaq 100 futures dropped 27.75 points.
Bank shares were under pressure after the New York Times reported the Federal Housing Finance Agency is suing big lenders like Bank of America Corp, JPMorgan Chase & Co and Goldman Sachs Group Inc.
The suit, involving mortgages sold during the housing bubble, accuses the banks of failing to perform due diligence and missing evidence that borrowers' incomes were falsified or inflated.
Bank of America shares were down 7 percent at $7.35 in premarket trade. JPMorgan fell 2.5 percent at $35.39.
Separately in the banking sector, the U.S. Federal Reserve has asked Bank of America to show what measures it could take if business conditions worsen, the Wall Street Journal reported, citing sources.
U.S. regulators have requested proprietary algorithmic data from high-frequency trading firms as part of an investigation into suspicious market activity.
AT&T Inc shares could be in focus as the company tries to salvage a planned $39 billion acquisition of smaller rival T-Mobile USA blocked by the U.S. government.
Netflix Inc fell nearly 10 percent to $210.12 in premarket trade after Starz Entertainment said it would pull its movies and television shows from Netflix's streaming service early next year.
U.S. stocks fell on Thursday, snapping a four-day rally.
(Additional reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)