Stock futures falter on fresh toxic asset fears

NEW YORK (Reuters) - Stock index futures pointed to a lower open on Tuesday after it was reported the International Monetary Fund was set to forecast toxic assets on the balance sheets of financial corporations could reach $4 trillion.

* Earnings season kicks off after the close as investors braced for aluminum producer Alcoa's quarterly results.

* Toxic debts racked up by banks and insurers could spiral to $4 trillion, new forecasts from the International Monetary Fund are set to suggest, British daily The Times reported on its website without citing sources. The IMF said in January that it expected the deterioration in U.S.-originated assets to reach $2.2 trillion by the end of next year.

* "The real jitters here for the market is the report from the IMF suggesting that toxic debts could actually spiral to $4 trillion," said Peter Cardillo, chief market economist at Avalon Partners in New York.

"You had some negative analyst reports yesterday on the banks and this IMF report certainly is not helping. It just basically is reopening old worries."

* S&P 500 futures fell 13.80 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 116 points, and Nasdaq 100 futures shed 19.25 points.

* European shares fell for a third consecutive session as financials weakened along with U.S. futures, reigniting fears over the global banking sector.

* On the macro side, the Bank of Japan unveiled further steps to ease credit strains on Tuesday, while Australia's central bank cut its key cash rate by 25 basis points to 3.00 percent, the sixth easing in eight months.

* A half-dozen bidders have emerged for American International Group Inc's asset-management unit, but the sale of the $100 billion portfolio has become complicated by client withdrawals and declines in asset prices.

* General Motors Corp's request for $10.3 billion in loans under a U.S. Department of Energy program is now contingent on the automaker's 60-day restructuring review, a top GM executive said on Monday.

* Ford Motor Co said its investors agreed to exchange $9.9 billion in debt for cash and stock, ratcheting up the pressure on its struggling U.S. competitors that also are trying to cut debt.

* U.S. shares snapped a four-session winning run on Monday after a prominent analyst reignited fears over the health of banks and the potential collapse of a takeover of Sun Microsystems bruised sentiment in the technology sector.

* The Dow Jones industrial average <.DJI> fell 41.74 points, or 0.52 percent, to 7,975.85. The Standard & Poor's 500 Index <.SPX> lost 7.02 points, or 0.83 percent, to 835.48. The Nasdaq Composite Index <.IXIC> was down 15.16 points, or 0.93 percent, at 1,606.71.

(Reporting by Chuck Mikolajczak; Editing by Theodore d'Afflisio)