US STOCKS-Futures fall sharply on China, durables

(Updates prices)

By Emily Chasan

NEW YORK, Feb 27 (Reuters) - U.S. stock index futures dropped on Tuesday after a weaker-than-expected economic report and a sharp fall in China's main stock index unnerved investors after two consecutive days of Wall Street losses.

Futures extended losses after a government report showed U.S. manufactured durable goods orders fell by a larger-than expected 7.8 percent in January. For details, see [ID:nN26314560]. Economists on average had forecast a 2.5 percent fall.

Stock markets around the world were in the red after China's Shanghai Composite .SSEC fell nearly 9 percent, its biggest drop in a decade, amid fears that authorities would crack down on stock market speculation. For details, see [ID:nSHA225912].

Weighing on technology stocks, shares of Apple Inc. (AAPL.O) slid 2 percent in early electronic trading to $86.86 after the company said it will delay its Apple TV device until mid-March. [ID:nN26325999].

"This does shine some light on some weakness in the manufacturing side, which could pose concern about (the economy) slowing even further," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank Private Wealth Management in New York. "It was down quite a bit before durable goods. The growth coming out of China -- there are question marks around that."

Standard & Poor's 500 futures SPc1 were down 11.6 points, below fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures DJc1 were down 82 points, and Nasdaq 100 NDc1 futures were down 25.75 points.

Also on the economic front, the Conference Board is set to release February consumer confidence at 10 a.m. (1500 GMT). At the same time the National Association of Realtors will report on existing home sales for January.

The reports come a day after former Federal Reserve Chairman Alan Greenspan was quoted as saying the economy could be in a recession by the end of the year, spooking investors.

In earnings news, shares of Nordstrom Inc. (JWN.N) were off 4.1 percent at $54.30 before the bell after the department store chain posted fourth-quarter earnings that trailed analysts' average forecast by a penny. [ID:nN26329582] (Additional reporting by Caroline Valetkevitch)