Wall Street futures down, eyes on recession impact

FRANKFURT, March 31 (Reuters) - U.S. stock index futures fell before the start of Wall Street trading on Monday, with the focus on economic data for clues about the duration and earnings impact of a recession that many analysts believe is now under way.

No S&P 500 companies are scheduled to report results and the U.S. corporate newsflow was thin over the last weekend of the quarter, which has seen the bellwether S&P 500 index .SPX fall 10.4 percent with one trading day to go.

The S&P 500's drop is in line with that of the MSCI benchmark world index .MIWD00000PUS, but considerably smaller than the 17.3 percent fall recorded by Europe's FTSEurofirst 300 .FTEU3 and the 18.2 percent slide for Japan's Nikkei .N225.

At 0905 GMT, Dow Jones futures were down 0.5 percent, S&P 500 futures also fell 0.5 percent and Nasdaq futures NDc1 lost 0.4 percent.

But the indicative Dow Jones index .DJII, which tracks how the Dow stocks trade in Frankfurt, was 0.4 percent higher.

"This week, the data calendar is heavy and so data releases are likely to be a key driver," ABN Amro said in a note.

The New York NAPM index of regional business activity for March is due at 1300 and the Chicago manufacturing PMI, also for March, at 1345 GMT. The Dallas Fed releases its March Texas manufacturing index at 1430 GMT.

"The first important activity indicators for March will arrive in the coming week in the form of ISM business confidence (manufacturing on Tuesday, services on Thursday) and the labour market report (Friday)," Danske Bank said in a note.

"There is not much prospect of change to the current picture of a U.S. economy that is slowing to around zero growth," Danske added.

"Worsening economic data will likely keep uncertainty about the duration of the recession and its impact on earnings high," said JPMorgan.

ING said: "Equities are now focusing on the duration of a U.S. recession, rather than wondering whether or not there will be one."

FALLING EARNINGS

Societe Generale, in a cross-asset research note, said opposing forces were keeping equity markets in their grip.

"The Fed is clearly determined to use all its powers to return some liquidity to the troubled credit markets, which continue to see casualties. On the other hand, the prospect of a recession in the U.S. and its likely spill-over is forcing market participants to anticipate lower corporate earnings."

Data compiled by Reuters Estimates showed that Wall Street analysts have cut further their first-quarter earnings forecasts for U.S. companies. S&P 500 earnings are now expected to fall 8.1 percent in the first quarter compared with a 5.5 percent decline projected last week.

The global credit crisis has significantly damaged the outlook for many major U.S. companies, particularly in the financial sector, Reuters Estimates found.

"Fear of the U.S. recession proving more far-reaching and of longer duration will again draw attention to the financial market crisis as a major factor," Commerzbank said in a note.

On a stock-specific level, eyes could be on Fortune Brands FO.N after the U.S. spirits maker said it would begin buying back its own shares having lost out in an auction for Absolut vodka maker Vin & Sprit to French Pernod Ricard (PERP.PA).

Fortune Brands shares traded 1.7 percent lower in Frankfurt AMB.F at 0905 GMT.

In New York, shares of IAC/Interactivecorp (IACI.O) rose 8.3 percent after Friday's closing bell after a court ruled in favour of its CEO in a legal dispute with controlling shareholder Liberty Media Corp. The ruling paves the way for a proposed spin-off of four company units.

U.S. stocks fell on Friday as a profit warning from department store operator J.C. Penney (JCP.N) raised concerns about slowing consumer spending while persistent worries about credit-related problems throttled financial stocks.

The Dow .DJI fell 0.7 percent to end at 12,216.40 points. The S&P 500 lost 0.8 percent and the Nasdaq .IXIC dropped 0.9 percent.

Chartists at German bank Helaba put the closest support level for the Dow at 12,150 points. (Editing by Quentin Bryar)