PARIS, Oct 8 (Reuters) - European stocks are set to dip in early trade on Tuesday, losing ground for the fourth time in five sessions as investors continued to move to the sidelines, rattled by the lack of significant progress in resolving the U.S. budget standoff. Adding to the negative sentiment, data showed growth in China's services industry slowed last month and optimism over the business outlook weakened, signalling that the recovery in the world's second biggest economy is likely to remain fragile. Also on macro front, data showed German exports rose slightly less than expected in August.. At 0614 GMT, futures for Euro STOXX 50, for UK's FTSE 100, for Germany's DAX and for France's CAC were flat to down 0.2 percent. As the partial U.S. government shutdown entered a second week, investors worry that Republicans and Democrats won't reach an agreement on the budget as well as on the debt ceiling ahead of the Oct. 17 deadline, which could result in a U.S. debt default. "With such huge uncertainties in the market at the moment, no one has the confidence or nerve to place any sizable positions," Capital Spreads trader Jonathan Sudaria said in a note. "The bulls are cautious of a prolonged stalemate and the bears are fearful of any surprise deal being done so the only trading of note is by those taking profits after the September run up." On Monday, European stocks drifted lower in thin trading volumes as the U.S. budget impasse kept investors on edge, with the FTSEurofirst 300 index of top European shares hitting a one-month closing low. Investors' risk aversion has been sharply rising in the past few days, with the CBOE Volatility index, or VIX, a measure of investor anxiety, jumping 16 percent on Monday to its highest level since June. The VIX has surged 48 percent over the past three weeks. The Euro STOXX 50 Volatility index rose as much as 10 percent on Monday, hitting a one-month high. -------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0616 GMT: LAST PCT CHG NET CHG S&P 500 1,676.12 -0.85 % -14.38 NIKKEI 13,894.61 0.3 % 41.29 MSCI ASIA EX-JP 546.25 0.7 % 3.81 EUR/USD 1.3572 -0.07 % -0.0009 USD/JPY 97.13 0.46 % 0.4400 10-YR US TSY YLD 2.636 -- 0.01 10-YR BUND YLD 1.816 -- 0.02 SPOT GOLD $1,324.26 0.22 % $2.97 US CRUDE $103.10 0.07 % 0.07 > GLOBAL MARKETS-Dollar near 8-mth low as shutdown enters 2nd week > US STOCKS-Wall St falls as no progress seen to resolve shutdown > Nikkei falls to 5-week low on U.S. shutdown, debt ceiling impasse > FOREX-Dollar drifts up from 2-mth low vs yen, U.S. impasse in focus > PRECIOUS-Gold near one-week high on softer dollar, U.S. shutdown > METALS-London copper steady on caution over U.S. fiscal standoff > Brent lower, holds above $109 despite cloudy demand outlook COMPANY NEWS: MONTE DEI PASCHI DI SIENA Bowing to European Union requests, loss-making Italian bank Banca Monte dei Paschi di Siena unveiled thousands of new job cuts on Monday and asset sale plans in a bid to return to profit and stave off nationalisation. TELECOM ITALIA Standard and Poor's said on Monday it had placed the ratings of Italy's Telecom Italia on creditwatch negative for a possible downgrade to junk status, citing rising management and governance concerns. Egyptian tycoon Naguib Sawiris has increased his short position in Telecom Italia shares after Telefonica struck a deal to gradually take control of the debt-laden Italian operator. REPSOL, GAS NATURAL Spanish oil major Repsol is putting the brakes on the planned sale of a 30 percent stake in Gas Natural Fenosa, sources said on Monday, facing the need to offer a steep discount to attract buyers. ALCATEL-LUCENT The telecom equipment maker plans to reduce its staff by 10,000 as part of a cost-cutting drive to save 1 billion euros by 2015, Les Echos and Le Figaro newspapers reported on their websites. ALITALIA, AIR FRANCE-KLM Italy's government will continue talks with top management at Alitalia on Tuesday to try to find a way to keep the cash-strapped airline in business after inconclusive talks on Monday. SANTANDER Spanish bank Santander said on Monday it had agreed to pay 140 million euros ($190 million) for a 51 percent stake in the country's largest consumer finance business from department store chain El Corte Ingles. COMMERZBANK Germany's second-biggest lender expects profits at its corporate banking unit Mittelstandsbank to decline this year, board member Markus Beumer told Boersen-Zeitung. DEUTSCHE BOERSE, LSE, EURONEXT BATS Chi-X Europe, the largest alternative trading venue in the region, said on Tuesday it plans to launch a pan-European listings business in November. RWE The utility plans to bundle its retail sales businesses in a European holding to cut costs, Handelsblatt newspaper reported, citing company sources. ABB The Swiss engineering group said on Tuesday it had agreed to sell all the assets of Baldor's generator-set business to Generac Holdings. BAYER The German drugmaker said it aims to bring its five most advanced mid-stage drug development projects into the third and last phase of testing on humans by 2015.