Futures Drop on Italy, Eurozone Worry

Stock index futures fell on Monday as political turmoil in Italy sparked worry the Eurozone debt crisis could consume the region's third largest economy.

Benchmark Italian government bond yields rose to their highest since 1997, approaching levels seen as unsustainable, ahead of a crunch vote on public finance in parliament on Tuesday.

Italian Prime Minister Silvio Berlusconi has one day left to win over undecided members of parliament and stop a group of party rebels threatening to bring down his government in a backlash over its failure to adopt reforms to defuse a debt crisis.

Meanwhile, Eurozone finance ministers will speed up work on strengthening a bailout fund to enhance its market credibility by the end of November, a month early.

S&P 500 futures fell 7.4 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures lost 83 points while Nasdaq 100 futures dipped 9.5 points.

Greek political leaders were set to choose who will lead a new coalition on Monday after Prime Minister George Papandreou sealed a deal with the opposition on a coalition to approve an international bailout.

With a light U.S. economic calendar this week and earnings season winding down, the euro zone debt crisis was expected to garner the bulk of investor attention this week.

Companies expected to post earnings on Monday include Priceline.com Inc and Sysco Corp.

In corporate news, consumer electronics chain Best Buy Co Inc. is buying British partner Carphone Warehouse Group Plc for $1.3 billion and scrapping plans for a chain of European megastores.

The euro and world stocks fell on Monday as political uncertainty in Italy prompted investors to cut exposure to riskier assets.

European stocks pared losses early Monday on intensifying market talk that Italy's Berlusconi could resign soon, easing fears over the country's ability to deal with its debt pile.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)