Wall St. set to slide at open on worries over Portugal, Italy

NEW YORK (Reuters) - U.S. stocks were poised to drop more than 1 percent at the open on Thursday, weighed by a slump in European shares on concern over the health of Portugal's top listed bank and following weak data from Italy.

With U.S. stocks trading near record highs, the selloff in Europe could entice shorts who have been mostly shut out of the market. Many market participants have called for a pullback, with the steady S&P 500 yet to see a daily decline of 1 percent or more since April 10.

Espirito Santo Financial Group , the largest shareholder in Portugal's Banco Espirito Santo , suspended trading in its shares and bonds, citing "material difficulties" at parent company ESI. Shares of the bank fell 17.2 percent.

Italian industrial output dropped 1.2 percent in May, its steepest monthly fall since November 2012, casting doubt over prospects for the country's economic recovery.

Portugal's benchmark stock index <.PSI20> fell 4.1 percent and Italy's FTSE MIB <.FTMIB> fell 2.3 percent. An index of European bank shares <.SX7P> was down 2.7 percent. U.S. banks will likely fall on concerns over exposure to Europe.

S&P 500 e-mini futures were down 22 points and fair value - a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract - indicated a lower open. Dow Jones industrial average e-mini futures <1YMc1> fell 181 points and Nasdaq 100 e-mini futures lost 48 points.

The CBOE Volatility Index is expected to snap higher after a period of hibernation. The VIX last week hit its lowest level since early 2007. The VelocityShares Daily 2x VIX Short Term exchange-traded note rose 9.4 percent in heavy trading.

Futures held on to steep losses even after data showed filings for new U.S. unemployment benefits claims fell last week to one of the lowest levels since before the 2007-09 recession.

Wholesale inventories and sales are due at 10:00 a.m. EDT.

Shares of Lumber Liquidators fell 21.8 percent in premarket trading a day after the hardwood flooring retailer cut its earnings outlook. Sandwich chain Potbelly estimated second-quarter revenue and profit below analysts expectations and its shares slid 18.7 percent in premarket trading.

(Reporting by Rodrigo Campos; Editing by Bernadette Baum)

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