Stock futures signal drop on recovery doubts

(Reuters) - Stock index futures pointed to a sharply lower open on Wall Street on Tuesday following a long holiday weekend, as mounting doubts over the pace of the global economic recovery hit stocks worldwide.

Futures for the S&P 500 were down 1.7 percent, Dow Jones futures down 1.4 percent and Nasdaq 100 futures down 1.3 percent at 0840 GMT.

Investors were rattled by data showing manufacturing growth in China and South Korea slowed down in May as the pace of new orders eased amid growing uncertainty over what damage Europe's debt crisis may do to Asia's export-dependent economies.

Manufacturing activity in the euro zone expanded in May at a considerably more sluggish pace than April's 46-month high as firms let off the production accelerator, a survey showed on Tuesday.

European stocks tumbled 2 percent in morning trade, with BP plummeting 13 percent following the company's failed attempt to stem the worst oil spill in U.S. history over the weekend. BP stock has lost more than a third of its value since the oil spill started six weeks ago.

Adding to investor concerns, the European Central Bank said euro zone banks face another 195 billion euros ($239 billion) in potential writedowns to the end of 2011 in a second round of losses from the financial crisis.

Advanced economies face years of anemic growth and the risk of a double-dip recession as their citizens cope with sluggish employment and highly indebted governments, economist Nouriel Roubini said on Monday.

Dubai Holding Commercial Operations Group (DHCOG) posted a $6.2 billion loss for 2009 on Tuesday due to Dubai's property crash and said it had access to emergency funding if needed.

DHCOG said it was in talks with banks to roll over debt, was considering asset sales and was renegotiating balances owed to trade creditors after the crash put its cash flow under severe pressure.

Prudential's bid for rival AIG's Asian unit appeared close to collapse after AIG rejected the British insurer's lowered offer of $30.38 billion in cash and shares.

Apple Inc said it sold 2 million iPads since launching the touch-screen tablet in the United States nearly two months ago and taking it to nine international markets this past weekend.

Investors awaited a flurry of macro data, including April construction spending as well as the Institute for Supply Management's May manufacturing index.

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

The Dow Jones industrial average <.DJI> dropped 122.36 points, or 1.19 percent, to 10,136.63. The Standard & Poor's 500 Index <.SPX> fell 13.65 points, or 1.24 percent, to 1,089.41. The Nasdaq Composite Index <.IXIC> declined 20.64 points, or 0.91 percent, to 2,257.04.

(Reporting by Blaise Robinson; Editing by Sharon Lindores)