Stock futures stay in red after Fed statement

NEW YORK (Reuters) - Stock index futures stayed sharply lower on Monday as concerns about the widening fallout from the credit crisis overshadowed a statement by the Federal Reserve that the central bank will increase a facility to lend to banks.

Initially futures pared losses after the Fed statement, but they soon drifted back to their original level pointing to a sharply lower start in a volatile trading session.

Stock markets slid in Asia overnight and were tumbling in Europe where major indexes were down about 5 percent on worry over the credit crisis.

S&P 500 futures dropped 26.40 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 slid 205 points and Nasdaq 100 futures shed 31.25 points.

(Reporting by Ellis Mnyandu; Editing by Kenneth Barry)