Stock futures imply weak open on Europe fears

NEW YORK (Reuters) - Stock index futures pointed to a sharply lower open on Wednesday 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 1.2 percent early Wednesday. <.EU>

Political gridlock in Greece also dented sentiment. The country moved closer to a second snap election after the head of the biggest party launched a new attack on leftist leader Alexis Tsipras, saying his plans for a new government would push Greece out of the euro zone.

"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 turmoil in Europe has been a big reason for declines on Wall Street lately as the corporate earnings season winds down and few domestic economic indicators are influencing equities.

The S&P 500 <.SPX> is down 2.4 percent so far this month while the Dow <.DJI> 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 14.7 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 27.5 points.

Walt Disney Co reported quarterly earnings that beat expectations late Tuesday on strong theme park attendance and higher cable network advertising revenue. Shares of the Dow component edged 0.2 percent higher to $44.40 premarket.

Macy's Inc first-quarter earnings rose more than expected, but the stock fell 5.9 percent to $37.19 before the bell on disappointment the department store chain didn't raise its outlook.

With 439 of S&P 500 companies reporting results as of Wednesday morning, 67 percent exceeded estimates, according to Thomson Reuters data. At the start of earnings season, more than 80 percent beat.

Other 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 lows.

(Editing by Jeffrey Benkoe)

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