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New York - US stock index futures pointed to a sharply lower Wall Street open on Thursday, with the Dow and S&P 500 likely to turn negative for the month on concerns over the strength of overseas economies and ongoing tensions with Russia.
Data showed US jobless claims rose more than expected in the latest week, a discouraging sign on the labour market ahead of the closely watched July payroll report on Friday.
Portugal's Banco Espirito Santo's slumped almost 40% to an all-time low as the bank's hopes of raising capital without taking state aid suffered a major blow following massive losses.
In Russia, Moscow fought back over new US and EU sanctions that had been imposed over Ukraine, announcing a ban on most fruit and vegetable imports from Poland.
Separately, Argentina defaulted for the second time in 12 years. Investors had hoped for a midnight deal with holdout creditors in Argentina, but the plan fell through. Even a short default will raise companies' borrowing costs, add to pressure on the peso, drain dwindling foreign reserves and fuel one of the world's highest inflation rates.
"Even though the default wasn't terribly unexpected, it creates a concern of systemic risk," said James Dailey, portfolio manager of Team Asset Strategy Fund in Harrisburg, Pennsylvania.
"On top of that, we haven't had any real downside for a while, and anyone who tries to argue that the market isn't at the very upper end of its historical range is flawed."
Argentinian stocks traded in the US were lower in premarket, including YPS SA, down 5.3% to $36.85 and Pampa Energy, down 5% to $10.75.
The drop in futures suggested Wall Street could have one of its biggest daily declines since July 17, when the S&P 500 fell more than 1% after a Malaysian passenger jet was shot down in Ukraine, stoking concerns that the crisis would have a wider global reach.
S&P 500 e-mini futures fell 16.5 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 - suggesting a lower open. Dow Jones industrial average e-mini futures fell 132 points and Nasdaq 100 e-mini futures lost 35.25 points.
If the losses hold, it would be enough to erase the monthly gains for the Dow and S&P, which are currently up 0.3% and 0.5% in July, respectively. The Nasdaq is up 1.2% and remains on track for its third straight positive month.
Dow component Exxon Mobil Corp posted second-quarter earnings that beat expectations, but shares fell 1.5%t to $101.70 before the bell.
Late on Wednesday, Whole Foods Markets cut its 2014 forecasts for a fourth time, sending shares down 5.4% to $37 in premarket trading.
Cigna reported second-quarter earnings that beat expectations while Time Warner Cable posted a rise in both earnings and revenue. Cigna fell 2.7% to $91 before the bell.
Akamai Technologies declined 6.3% to $56.90 in premarket trading a day after it fell short of investor hopes it would exceed its own revenue forecast due to heavy World Cup traffic.
