U.S. Stock Futures Signal Pause After Selloff

Stock index futures pointed to a steady-to-lower open on Wall Street on Thursday, with futures for the S&P 500 flat, Dow Jones futures down 0.04 percent and Nasdaq 100 futures down 0.15 percent at 1055 GMT.

European stocks dropped 1.3 percent in morning trade, mirroring a sell-off on Wall Street on Wednesday after ratings agency Fitch said the outlook for U.S. banks could worsen if the euro zone debt crisis is not resolved quickly. <.EU>

Germany and France have stepped up their war of words over whether the European Central Bank should intervene more decisively to halt the euro zone's debt crisis after modest bond purchases by the central bank failed to calm jittery investors.

Spain paid the highest rate to sell its 10-year debt since 1997 on Thursday, just shy of the 7 percent mark seen as unsustainable, as the country is swept deeper into the euro zone's debt crisis ahead of a Parliamentary election on Sunday.

The Federal Reserve believes U.S. banks can withstand an escalation of the European debt turmoil, but the fate of money market funds is worrisome, a top Fed official said on Wednesday.

Limited Brands Inc , parent of lingerie chain Victoria's Secret, reported a higher-than-expected quarterly profit, as tight expense controls boosted operating margins, and raised its profit outlook for the year.

Google Inc turned on the music at its new online store, aiming to wrest the lead from Apple Inc and Amazon.com Inc in audio entertainment distribution despite the absence of a major record label.

BHP Billiton , the world's biggest mining house, said it had become more cautious over global economic conditions in the last month.

On the macro front, figures include housing starts and permits, as well as weekly jobless claims.

Data storage equipment maker NetApp Inc reported a 6 percent dip in fiscal second-quarter profit and forecast lower than expected results for the current quarter as large corporations trim technology spending.

U.S. stocks fell on Wednesday, with selling accelerating late in the session on more warnings about the potential impact of the euro zone's debt crisis on the global economy and the banking system.

The Dow Jones industrial average <.DJI> dropped 190.57 points, or 1.58 percent, to 11,905.59. The Standard & Poor's 500 <.SPX> fell 20.90 points, or 1.66 percent, to 1,236.91. The Nasdaq Composite <.IXIC> dropped 46.59 points, or 1.73 percent, to 2,639.61.

(Reporting by Blaise Robinson; Editing by David Holmes)