US futures fall after Argentina default

New York - US stock index futures were sharply lower on Thursday, after Argentina defaulted for the second time in 12 years, raising concerns the country's weakness could spread to the region.

The US bourse is set to open higher as European leaders get ready to meet. Credit: REUTERS

A big market decline would mean that all three major US indexes may lose their gains for July, which had been set to be the sixth positive month for both the Dow and S&P 500.

Even a short default will raise companies' borrowing costs, add to pressure on the peso, drain dwindling foreign reserves and fuel one of the world's highest inflation rates.

Dow Jones industrial average e-mini futures fell 85 points and Nasdaq 100 e-mini futures lost 25.25 points.

If the Nasdaq ends higher for July, it would be its third straight positive month.

On Wednesday, the Federal Reserve gave a rosier assessment of the US economy while reaffirming it was in no hurry to raise interest rates.

Late Wednesday, Whole Foods Markets Inc cut its 2014 forecasts for a fourth time, sending shares down 5.3 percent to $37.03 (R396) in premarket trading.

That comes ahead of the closely watched payrolls report due out Friday, which is expected to show fewer jobs created in July than June. - Reuters