US stock futures slump on Japan nuclear concerns

U.S. stock futures point to a sharply lower opening for Wall Street Tuesday, following slump in European and Asian stock markets amid fears of a nuclear disaster in Japan.

Futures on the S&P 500 are down 2.63 percent, futures on the Dow Jones Industrial Average are down 2.22 percent and Nasdaq100 futures are down 2.72 percent.

Japanese stock markets slumped for the second day on escalating fears of a nuclear crisis after a radiation leak was detected at the Fukushima Daiichi nuclear plant and residents were warned to stay indoors. Benchmark Nikkei index slumped 10.55 percent or 1,015.34 to 8,605.15 after plunging 6.18 percent in the previous session. Meanwhile the Topix index plunged 9.47 percent to 766.73 and recorded its worst two-day slump since 1987.

Japan's prime minister Naoto Kan said on Tuesday that radioactive levels had become high around a nuclear power plant damaged by the nation’s biggest earthquake, and there was a risk of radiation leaking into the atmosphere. Kan urged people within 30 km (18 miles) of the facility north of Tokyo to remain indoors and the French embassy in the capital warned in an advisory that a low level of radioactive wind could reach Tokyo within 10 hours.

On the economic front, investors are likely focus on the FOMC meeting and interest rate decision, which is due to be released at 2:15 pm EDT. The FOMC will probably maintain its current monetary policy as the world’s largest economy is still on its way to recover from the worst recession since the Second World War.

The interest rate is expected to remain unchanged at 0.25 percent. The Federal Reserve kept interest rates at historic lows in the range between 0 percent and 0.25 percent in an attempt to increase consumer consumption and business operations by making borrowing cheaper to revive the economy.

Other economic data including NY Empire State Manufacturing Index and monthly Import Price Index will be released before the markets open, while National Association of Home Builders (NAHB) Housing Market Index will be released after the opening bell.

U.S. stocks ended lower on Monday, as investors were worried about the impact of the devastating earthquake and tsunami in Japan on the global economy.

The euro declined 0.85 percent to 1.3874 against the dollar and the yen gained 0.26 percent against the greenback.

Crude oil futures declined 2.95 percent to $98.20/barrel and gold futures fell 1.28 percent.

European stock markets are currently trading in lower with FTSE 100 down by 158.21 points, DAX30 down by 336.39 points and CAC 40 down by 141.08 points.