Stock index futures pointed to a lower open on Tuesday after a long weekend as tensions surrounding North Korea unsettled investors and hopes for a quick economic recovery in the near-term ebbed.

North Korea, despite international condemnation of its latest nuclear test, fired two more short-range missile off its east coast on Tuesday and accused the U.S. of plotting against its government.

Right now the keys to the market are going to come down to the economy and how we navigate our way through the next set of concerns, which include the dollar, heightened geopolitical tensions and rising oil, said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey.

The concern is that the market is facing 4 down days and investors are questioning the recent strength and resiliency and ability of the market to come out of this mini-slump.

S&P 500 futures fell 2.80 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 shed 40 points, while Nasdaq 100 futures were off 10.75 points.

U.S. oil prices for July delivery fell $1.28 to $60.36 a barrel pressured by a firmer U.S. dollar and expectations that an OPEC meeting later this week could keep the producer group's output unchanged. Chevron Corp fell 1.1 percent to $63.72 while Exxon Mobil Corp slid 0.6 percent to $68.39 in premarket trade.

Apple Inc shares rose 2.5 percent to $125.50 in premarket trade after Morgan Stanley upgraded the iPhone maker to overweight, saying the company is emerging as the clear leader in the battle over mobile Internet and will see iPhone-driven earnings growth over the next two years.

European shares fell in early trade as political risk reared its head with a reported missile launch by North Korea, further dampening a rally that has added a third to equities since early March.

Asian shares fell on Tuesday as a report of fresh missile tests by North Korea added to market tensions at a time when investors are questioning whether they are too optimistic about the global economic outlook.

Investors will also keep a close eye on the fixed income front. The benchmark U.S. Treasury debt price rose in Asian trade on Tuesday, with the yield edging away from last week's six-month peak, while the market braced for $101 billion worth of government debt sales this week.

The U.S. Treasury sells $40 billion of two-year notes on Tuesday, $35 billion of five-year debt on Wednesday and $26 billion of seven-year paper on Thursday, matching a record for weekly bond sales set in April.

On the economic front, investors were bracing for key U.S. consumer confidence data for May, due at 10 a.m. and the Case Shiller housing price index for March 9 a.m.

U.S. stocks retreated for a fourth session on Friday on persistent concerns over the U.S. budget deficit, with U.S. Treasuries and the dollar losing ground.

The Dow Jones industrial average <.DJI> dropped 14.81 points, or 0.18 percent, to 8,277.32. The Standard & Poor's 500 Index <.SPX> fell 1.33 points, or 0.15 percent, to 887.00. The Nasdaq Composite Index <.IXIC> lost 3.24 points, or 0.19 percent, to 1,692.01.

For the week, though, stocks finished moderately higher, with the blue-chip Dow average up 0.1 percent, the S&P 500 up 0.5 percent and the Nasdaq up 0.7 percent.

Since reaching a low in early March, the Dow has gained 28 percent and the S&P 500 has risen 33 percent.

(Reporting by Chuck Mikolajczak; Editing by Theodore d'Afflisio)

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