Futures tumble on expected debt panel defeat (Reuters)

NEW YORK (Reuters) ? Stock index futures were sharply lower on Monday, extending the previous week's losses as a congressional "super committee" was expected to concede defeat in its bid to lower the deficit.

The committee's co-chairs will issue a statement later Monday, declaring they were unable to reach a deficit-reduction deal, according to sources, and could not bridge deep divides over taxes and spending.

The developments add another degree of uncertainty to a market that continues to struggle to gain traction. It also recalls the August political impasse over the U.S. debt ceiling that led to the United States losing its triple-A credit rating.

While Moody's Investors Service has said a failure by the committee to reach agreement would not lead to a rating change, Fitch Ratings has not ruled out a "negative rating action" if the committee fails to reach a deal, or if the economy grows less than expected.

Last week, equities suffered their worst week in two months on concerns about debt problems both domestically and in Europe.

The FTSEurofirst 300 (.FTEU3) index fell 2.5 percent early Monday after Moody's said a recent rise in interest rates on French government debt and weaker economic growth prospects could be negative for the country's credit rating.

Spanish prime minister-elect Mariano Rajoy was under pressure to details his policies to overcome a severe economic crisis after his center-right party won the country's biggest election victory in 30 years.

S&P 500 futures fell 18.4 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 sank 157 points, and Nasdaq 100 futures lost 27 points.

The S&P failed to rise above 1,225 on Friday after a drop below it on Thursday triggered massive selling, and it is now strengthening as technical resistance.

Last week, the Dow fell 2.9 percent, the S&P dropped 3.8 percent, and the Nasdaq lost 4 percent.

Trading volume is expected to be light this week due to the U.S. Thanksgiving holiday on Thursday. The light action could add to market volatility.

In company news, U.S. property and casualty insurer Alleghany Corp (Y.N) will buy Transatlantic Holdings Inc (TRH.N) for about $3.4 billion, or $59.79 per share. Transatlantic stock closed Friday at $54.43.

Dow component Hewlett-Packard Co (HPQ.N) and Tyson Foods Inc (TSN.N) were scheduled to report quarterly results on Monday. October existing home sales are also on tap, and are seen falling modestly from the previous month.

(Editing by Jeffrey Benkoe)

Source: http://us.rd.yahoo.com/dailynews/rss/stocks/*http%3A//news.yahoo.com/s/nm/20111121/bs_nm/us_markets_stocks

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