Lower open seen as Caterpillar woes weigh

NEW YORK (Reuters) - Stock index futures pointed to a lower Wall Street open on Monday after CATERPILLAR (CAT.NY)Inc offered outlook that added to investors' fears about the deepening recession.

The news from the maker of bulldozers and excavators, also a major exporter, deflated earlier enthusiasm that had been spurred by a multi-billion dollar takeover in the drug industry.

Shares of Caterpillar, a Dow component, dropped more than 12 percent to $31.20 before the bell, positioning the stock to become one of the worst drags on the market.

S&P 500 futures slipped 0.40 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 shed 18 points, while Nasdaq 100 futures edged up 0.25 points.

Before Caterpillar's announcement, Dow futures had been up more than 40 points.

Caterpillar forecast 2009 profit would drop significantly from 2008. The company also said it initiated actions which will remove about 20,000 workers from its business as it grapples with fallout from the recession.

But shares of Wyeth jumped more than 5 percent before the bell to $46.20 after Pfizer Inc , the world's largest drugmaker, said it would buy its U.S. rival for about $68 billion in a move to diversify its revenue base.

(Editing by Chizu Nomiyama)

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