Stock futures down again on Europe concerns

NEW YORK (Reuters) - Stock index futures fell on Wednesday, with investors again taking their cue from Europe as political uncertainty hung over Greece and concerns arose over the frail state of Spanish banks.

Spain will demand banks set aside another $45 billion against loans to builders as it battles to rebuild confidence, sources told Reuters. Huge bank losses have raised fears the country may need an international bailout.

U.S.-listed shares of Banco Santander SA dropped 5.5 percent to $6.02 in premarket trading. European shares were off 1 percent early Wednesday.

The gridlock after elections in Greece has also dented sentiment. Leftist leader Alexis Tsipras was to meet the heads of Greece's mainstream parties Wednesday to try to form a coalition government, but the effort was expected to fall flat after he demanded they first agree to tear up the country's EU/IMF bailout deal.

"If Greece doesn't receive bailouts, they'll likely be expelled from the EU, and if that happens all hell could break loose over there," said Jay Feuerstein, chief executive of asset management firm 2100 Xenon Group in Chicago.

The situation in Europe has been a primary driver for Wall Street lately as the corporate earnings season winds down and there are few domestic economic indicators to influence equities.

The S&P 500 is down 2.4 percent so far this month while the Dow has fallen for five straight sessions. However, on both Monday and Tuesday equities posted late-day rebounds that cut the session's losses.

"There are many investors willing to put money to work on dips," said Feuerstein. "But I'm not sure that will work this time. I think the consistent downward motion is where we are right now."

S&P 500 futures fell 11.2 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 were down 72 points, and Nasdaq 100 futures lost 18.5 points.

Walt Disney Co reported quarterly earnings that beat expectations late Tuesday, helped by strong theme park attendance and higher cable network advertising revenue.

Macy's Inc reported higher quarterly profit early Wednesday, helped by online sales.

With 434 of S&P 500 companies reporting results as of Tuesday morning, 66.8 percent exceeded estimates, according to Thomson Reuters data. At the start of the earnings season, more than 80 percent had beaten expectations.

Major companies on tap to report Wednesday included Cisco Systems Inc , Priceline.com Inc and News Corp .

Yahoo Inc director Patti Hart, who led the hiring process of Chief Executive Scott Thompson, will give up her seat on Yahoo's board as the Internet company investigates Thompson's educational credentials.

The S&P 500 fell through support at 1,350 in Tuesday's decline, reaching levels not seen since early March, but buyers emerged late in the session and Wall Street ended off its worst lows.

(Editing by Jeffrey Benkoe)