Wall Street was set to fall at the open on Monday on worries that problems persist for the struggling banking sector and after Bank of America's results relied heavily on one-time items as credit quality deteriorated markedly.

Financial shares were likely to face pressure after Bank of America Corp posted a big increase in troubled loans, while its purchase of Merrill Lynch & Co helped quarterly profit more than double.

Bank of America was down 8.1 percent at $9.74 before the opening bell.

Shares of Citigroup Inc lost 6.6 percent to $3.41 after analysts at Goldman Sachs said credit losses at the bank continued to grow at a rapid rate.

There's this real sense that there are pending problems in the financial space, that all of the issues have not been addressed yet and it's definitely going to overhang this market until we get a couple quarters out, said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

There's a doubt to the prospect of a healthier financial sector. You can feel it, it's palpable.

On the upside, shares of Sun Microsystems Inc surged 37.7 percent to $9.21 after Oracle Corp said it would buy the company for about $7.4 billion. The proposed deal comes after IBM's talks to buy Sun broke down earlier this month.

S&P 500 futures dropped 14.60 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 slid 139 points, and Nasdaq 100 futures fell 24 points.

Adding to the negative tone, U.S. President Barack Obama said over the weekend that the economy remains under strain and his top economic adviser tempered hopes for a speedy recovery.

American International Group Inc delayed filing its annual proxy statement as it weighs a potential reshuffling of its board, the Wall Street Journal reported, citing a person familiar with the matter.

Among the round of morning earnings, Eli Lilly and Co reported higher-than-expected profit, sending the drugmaker's shares up 2.8 percent at $34.70.

Stocks rose on Friday, with the Dow scoring its biggest six-week gain in nearly 71 years, helped by a reassuring report on the mood of consumers and stabilization in General Electric Co and Citigroup's quarterly results.

As of Friday's close, the Dow is up 22.7 percent over the past six weeks, making this the largest six-week gain since July 29, 1938, while Friday's close also marked the S&P 500's longest weekly winning streak since 2007.

After the bell, International Business Machines Corp investors will focus on the impact of the global economic slowdown on the tech bellwether's results, which have held up relatively well so far, thanks to its software and services business.

Texas Instruments Inc is also due to release quarterly results after the close, while market watchers will take in a reading on leading economic indicators later in the morning.

(Reporting by Leah Schnurr; editing by Jeffrey Benkoe)