By Ellis Mnyandu
NEW YORK (Reuters) - Stock index futures fell on Tuesday as mounting fallout from the economic slump drove a worldwide equities sell-off and investors set their sights on a push for remaining financial rescue funds in Washington.
A day after Alcoa Inc
Stocks set to weigh on the market include Citigroup
Shares of Citigroup, a Dow component, fell 2.1 percent to $5.48 before the bell.
"There's a little bit of a reminder that the economy is not recovering very quickly," said Cleveland Rueckert, market analyst at Birinyi Associates Inc in Stamford, Connecticut.
"There's been a pretty negative reaction to Citi selling Smith Barney. As long as you have Citi on the negative front, I really don't see this market taking off."
S&P 500 futures shed 7.00 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 declined 61 points while Nasdaq 100 futures slipped 9.50 points.
JPMorgan analysts forecast fourth-quarter and 2009 results of big banks will be hit hard by sharply higher credit costs and market-related weakness.
News China's exports and imports fell in December for a second straight month gave fresh evidence that the global slump is worsening. China is the world's fourth-largest economy.
After the bell on Monday, Alcoa posted an unexpectedly large quarterly loss. Its stock, a Dow component, was down 1.6 percent at $9.90 before the bell.
The diminishing appetite for riskier assets led investors to pummel stocks across Asia, where Japan's Nikkei <.N225> slid nearly 5 percent overnight, and in Europe benchmark indexes were down 2 percent or more on Tuesday.
In response to the faltering economy, U.S. President-elect Barack Obama is pushing for Congress to release the remaining $350 billion of the $700 billion financial industry bailout.
Obama, who is due to be sworn in on January 20, wants the aid to go directly to consumers threatened by home mortgage foreclosures and plans to meet on Tuesday with Senate Democrats to seek their backing for his request for the funds.
It will be Obama's second trip to Capitol Hill in as many weeks and will come two days after his economic team lobbied Senate Democrats to support the request, as well as an approximately $800 billion economic stimulus package.
In response to a plea from Obama, President George W. Bush sent the request for the $350 billion to Congress on Monday evening. Lawmakers have 15 days to block it.
Federal Reserve Chairman Ben Bernanke said in a speech for delivery at the London School of Economics London that more bank capital injections may be needed to stabilize credit markets.
U.S. stocks fell on Monday as concerns about massive credit losses at Citigroup knocked its shares 17 percent lower, dragging down bank stocks, and on fears of a dismal fourth-quarter earnings season.
(Editing by James Dalgleish)
