Stock futures dip as worries persist on global economy

Stock index futures edged down on Wednesday and followed international equity markets lower as fears persisted of a slowdown in the global economy.

U.S. stocks struggled to make headway on Tuesday, and while they broke a five-day losing streak, buyers evaporated in the afternoon in what has become a familiar pattern over the past two months.

Rick Meckler, president of investment firm LibertyView Capital Management in New York, said the failure to hold gains in the last session was a worry for investors as the market tries to find a bottom. Signs that U.S. growth is slowing has hit equity markets in recent weeks.

Whether we're facing a double-dip recession or whether this is just the slowing that results from the withdrawal of some government stimulation, things have certainly slowed down, and worries about that have spread into the market, he said.

S&P 500 futures fell 1.9 points and were 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 dropped 19 points, and Nasdaq 100 futures lost 2.5 points.

The S&P 500 index has fallen more than 15 percent since a recent peak on April 23 and is down 7.8 percent since the start of the year.

U.S. Treasury Secretary Timothy Geithner sounded a positive note on Tuesday, saying he was confident the economy would continue to grow as it recovers from the financial crisis. But he added that recoveries were never even, never steady.

Euro zone economic growth in the first three months of 2010 was confirmed on Wednesday at 0.2 percent quarter-over-quarter, but any stronger expansion in the second quarter could be short-lived.

Details emerged on European bank stress tests, providing investors some clarity into troubled sector. The test will focus on bonds of peripheral euro zone nations and will not include German sovereign bonds, two banking sources in Germany told Reuters.

In what could be an early taste of the coming earnings season, Family Dollar Stores Inc posted higher quarterly profit as customers sought cheaper products in the face of high unemployment, but the discount chain forecast fourth-quarter earnings below expectations. The shares fell about 6 percent in premarket trade to $37.10.

BP Plc Chief Executive Tony Hayward met with officials from Abu Dhabi's investment authority as speculation mounted the sovereign fund would make a fresh investment. BP's New York-traded shares rose 2.5 percent to $32.71 in premarket trade.

Asian and European markets slid, as Japan's Nikkei average <.N225> closed down 0.6 percent and the pan-European FTSEurofirst 300 <.FTEU3> declining 0.6 percent

(Editing by Padraic Cassidy)