Dow and S&P index futures indicated a drop of about 1 percent at the open on Tuesday as a slowdown in Asian manufacturing added to doubts about the pace of an economic recovery.

Investors also fretted about the euro zone sovereign debt crisis after Spain's credit rating was downgraded by Fitch last week. Adding to concerns, the European Central Bank said banks in the region face another $239 billion in potential writedowns.

A survey showed manufacturing activity in the euro zone expanded in May at a considerably more sluggish pace than in April, while separate data indicated the pace of China's factory output eased last month.

This is adding to the fears and concerns that have perpetuated in the overseas markets for a while, said John Massey, portfolio manager at SunAmerica Asset Management in Jersey City, New Jersey.

The double-digit GDP growth that we've seen in China is unlikely to continue in this environment.

Influential economist Nouriel Roubini said advanced economies face years of anemic growth and the risk of a double-dip recession as they cope with a weak labor market and high debt.

U.S. economic indicators on tap for Tuesday include April construction spending data and the Institute for Supply Management's May manufacturing index, both due at 10:00 a.m.

EDT (1400 GMT).

April construction spending is expected to remain flat, compared with 0.2 percent growth in the prior month. The Institute for Supply Management's May manufacturing index is seen at 59 in May, down from April's reading of 60.4.

ISM will probably moderate in May, which is expected and seasonal, but given the rampant concerns about the global economy, it won't be helpful, Massey said.

S&P 500 futures fell 13.7 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 sank 110 points, and Nasdaq 100 futures lost 11.25 points.

American International Group Inc shares fell 2.8 percent to $34.40 in premarket trading after it rejected a lower offer from Prudential Plc for its Asian division.

Crude oil futures were down 1.5 percent as the manufacturing data renewed concerns about demand. The energy select sector SPDR ETF fell about 2 percent.

U.S.-listed shares of BP Plc dropped 14 percent to $36.93 before the bell following its failed attempt to stem the Gulf of Mexico oil spill. BP stock has lost more than one-third since the massive spill started six weeks ago.

On the upside, ev3 Inc surged 18 percent to $22.30 premarket after Covidien Plc agreed to buy the medical device maker $2.6 billion.

Apple Inc rose about 1 percent to $259.15 in premarket trading after it said it had sold 2 million of its iPad tablet computers since the U.S. launch nearly two months ago and the unveiling in nine international markets this past weekend.

Hewlett-Packard Co plans to spend $1 billion to bolster its corporate services business, and will shrink its workforce by 3,000 jobs over three years as it consolidates related operations. The Dow component slid nearly 1 percent to $45.64 premarket.

U.S. stocks fell Friday, capping their worst month in over a year as a Fitch downgrade of Spain's credit rating reignited worries about euro-zone debt.

(Editing by Jeffrey Benkoe)

China Manufacturing New Jersey Investment