Stock futures down on earnings caution, bank jitters

NEW YORK (Reuters) - Stock index futures pointed to a lower open on Monday with investors cautious ahead of the latest round of earnings and after Bank of America's results relied heavily on one-time items, while credit quality deteriorated markedly.

Bank of America Corp said it earned $4.2 billion in the first quarter.

Adding to the negative tone, U.S. President Barack Obama said over the weekend that the economy remains under strain and his top economic advisor tempered hopes for a speedy recovery.

"There's this real sense that there are pending problems in the financial space, that all of the issues have not been addressed yet and it's definitely going to overhang this market until we get a couple quarters out," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

"There's a doubt to the prospect of a healthier financial sector. You can feel it, it's palpable."

But on the upside, shares of Sun Microsystems Inc jumped 27.1 percent to $8.50 after Oracle Corp said it would buy the company.

S&P 500 futures dropped 12.80 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 109 points, and Nasdaq 100 futures fell 18.50 points.

Stocks rose on Friday, with the Dow scoring its biggest six-week gain since July 1938, helped by a reassuring report on the mood of consumers and stabilization in General Electric and Citigroup's quarterly results.

As of Friday's close, the Dow is up 22.7 percent over the past six weeks, making this the largest six-week gain since July 29, 1938, while Friday's close also marked the S&P 500's longest weekly winning streak since 2007.

American International Group Inc delayed filing its annual proxy statement as it weighs a potential reshuffling of its board, the Wall Street Journal said, citing a person familiar with the matter.

Shares of Eli Lilly rose 2.8 percent to $34.70 before the bell after the company reported first quarter results.

GlaxoSmithKline , the world's second-largest drugmaker, agreed to buy privately owned U.S. skincare specialist Stiefel Laboratories Inc for up to $3.6 billion, the two companies said.

After the bell, IBM investors will focus on the impact of the global economic slowdown on the tech bellwether's results, which have held up relatively well so far thanks to its software and services business.

Texas Instruments is also due to release quarterly results after the Wall Street close.

(Reporting by Leah Schnurr; Editing by Theodore d'Afflisio)