Wall Street to fall at open as EU summit hopes wane

NEW YORK (Reuters) - Stocks were set to slide at the open on Monday as expectations waned that a European Union summit this week would help calm the escalating euro zone debt crisis.

Spain formally requested euro zone rescue loans for up to 100 billion euros ($125 billion) to recapitalize its banks, saying the final amount of assistance would be set at a later stage. Some market economists say it is merely a prelude to a full bailout for Spain.

Spanish government bonds came under pressure with the 10-year bond yield 18 basis points higher at 6.53 percent, near the 7-percent mark that forced other indebted European countries to ask for bailouts.

Markets continue to react to European headlines as the spiraling debt crisis in Europe could further hurt an already weak global economy. Austerity measures pushed forward by Germany have Greece mired in a long recession, and investors worry Spain could follow Greece's path as Madrid's borrowing costs remain stubbornly high.

A German government spokesman said the EU will probably not take any decisions on Greece in a summit scheduled for Thursday and Friday, in which Greeks were hoping to ease the terms of their bailout.

"There's a sense the EU summit is going to be inconclusive, so we're seeing risk assets fall," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Cardillo said the market will focus this week on Europe, but the lagging fear is a stalling global economy.

"The European situation is just a big excuse. If, all of a sudden, we see economic growth in Asia and the United States, Europe would be a secondary deal for the market and not the focus."

S&P 500 futures fell 12 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 fell 92 points, and Nasdaq 100 futures lost 17.75 points.

A European equity benchmark <.FTEU3> fell more than 1 percent and the dollar, seen as a safe-haven when European markets are volatile, rose as worries about faltering global growth lingered after last week's soft manufacturing data worldwide. <.EU>

The Commerce Department's new home sales for May are due at 10 a.m.. Economists in a Reuters survey forecast a total of 346,000 annualized units compared with 343,000 in April.

Under the direction of Chief Executive Aubrey McClendon, Chesapeake Energy Corp plotted with its top competitor to suppress land prices in one of America's most promising oil and gas plays, a Reuters investigation has found. Chesapeake shares dropped more than 5 percent in premarket trade.

Shares of Bristol-Myers Squibb Co fell 4.6 percent and Pfizer Inc lost 2.9 percent in premarket trading after the companies announced their closely watched blood clot preventer failed to win approval from U.S. health regulators.

Research in Motion Ltd. shares rose 1 percent in premarket trading. The BlackBerry maker is considering splitting its business in two, separating its struggling handset manufacturing division from its messaging network, The Sunday Times reported.

U.S. regulators approved a generic version of Shire's ADHD drug Adderall XR made by Actavis, which is being bought by Watson Pharmaceuticals . Watson Pharma shares rose 2.4 percent in light premarket trading.

U.S. stocks ended higher on Friday, led by gains in bank shares, as the S&P 500 index bounced back from its second-worst decline of the year. The gains were not enough, however, to push indexes into positive territory for the week.

(Reporting by Rodrigo Campos; Editing by Padraic Cassidy)

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