US STOCKS-Futures point to sharp drop after Japan data

* Japan economy returns to growth, concerns over recovery

* Colonial bank biggest U.S. failure this year

* Futures off: S&P 21.80 pts, Dow 191 pts, Nasdaq 34.25

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NEW YORK, Aug. 17 (Reuters) - U.S. stock index futures slid about 2 percent on Monday as global equities sold off after data from Japan showed that while the world's No. 2 economy has returned to growth, a recovery may be shaky.

* Japanese data showed its economy emerged from its longest recession in 60 years in the second quarter, but economists said it would be a long road to a sustained recovery. (For details, see [ID:nT212505]).

* "The economic situation is not as clear cut as the recent rally indicated. The game is not over, there is more work to be done economically," said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey. "This morning is one of these wake-up calls that the party may have to end some time."

* S&P 500 futures SPc1 slid 21.80 points, and 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 DJc1 tumbled 191 points, and Nasdaq 100 futures NDc1 were down 34.25 points.

* Japan's Nikkei index .N225 fell 3.1 percent in its biggest one-day fall in nearly five months, Chinese stocks .SSEC tumbled 5.8 percent to their lowest close in two months, and European shares .FTEU3 traded down 2.4 percent, led by banks and commodity related stocks.

* Oil futures continued a slide from the end of last week, falling 2.4 percent and mirroring a drop in other commodities prices, as concerns that commodity prices, like equities, had run ahead of the global economic recovery. [O/R]

* Last week, major U.S. indexes snapped a 4-week winning streak after a string of weaker-than-expected economic data, including a bleaker U.S. consumer sentiment index Friday.

* The S&P 500 index has rallied around 50 percent since hitting a closing low on March 9, with the latest leg from early July coming as a response to better-than-expected U.S. corporate earnings. The run-up has led many investors to expect a pullback.

* In earnings news, retailer Lowe's Cos Inc (LOW.N) reported lower-than-expected second-quarter earnings and forecast 2009 sales would be down about 3 percent. [ID:nBNG149135] Its shares slid 7.6 percent in premarket trade.

* In more worrying news from the financial sector, Colonial Bank of Montgomery, Alabama, was shuttered Friday and its assets sold to southeast regional bank BB&T Corp (BBT.N), marking the largest bank failure so far this year. [ID:nBNG404782]

* The New York Fed will release its Empire State general business conditions index at 8:30 a.m. EDT (1230 GMT), one of the earliest monthly guideposts to U.S. factory conditions. Analysts in a Reuters survey expect the index to rise to 3.00 from minus 0.55 last month. (Reporting by Edward Krudy; editing by Jeffrey Benkoe)