* S&P 500 index futures down about 1 percent on uncertainty
of rescue plan details
* U.S. Treasury futures off on U.S. debt worry
* New Zealand stocks open higher
* Oil drops below $104 a barrel
* Yen gains against the dollar
By Kristina Cooke and Dan Burns
NEW YORK, Sept 21 (Reuters) - Uncertainty about the
workings of the government's $700 billion bank bailout drove
U.S. stock index futures and bond futures lower Sunday evening
as Asian markets got ready to start the week.
The dollar weakened against the yen on concerns that
government borrowing will exacerbate the U.S. budget deficit as
it needs to issue more debt to finance its rescue plan to buy
bad mortgages from financial institutions.
Negotiations between Congress and U.S. Treasury Secretary
Paulson ratcheted up over the weekend after the administration
and U.S. congressional leaders began swapping proposals. For
more please double click [].
S&P 500 futures <SPc1> fell 11.80 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 <DJc1> dropped
201 points and Nasdaq 100 <NDc1> futures shed 18.75 points.
The drop in stock index futures came on the heels of
Friday's massive rally in stocks worldwide -- the largest ever
one-day advance as measured by market value. The MSCI main
world equity index <.MIWD00000PUS> added more than $1.5
trillion in value on the day.
Robert Loest, senior portfolio manager at Integrity Mutual
Funds in Minot, North Dakota said the drop in futures was a
combination of short-term profit-taking and second-guessing how
the bailout plan will ultimately be come out.
"Congress hasn't written the legislation and the devil is in
the details. The taxpayers are on the hook for an awful lot of
money," Loest said.
The dollar was little changed against the euro but weakened
against the Japanese yen in early trading as Asian markets
opened the week. It last crossed at 1.4459 euro compared with
1.4464 late Friday and at 106.95 yen versus 107.42 on Friday.
"This is partially people looking at the plan and trying to
figure out what it all means. I don't know the plan is a save
all," said Joe Saluzzi, partner at Themis Trading in Chatham,
New Jersey.
"It may have stopped us from the death spiral, but equities
in general are still going to have a tough time. You still have
to pay the piper -- where are the earnings, unemployment."
Saluzzi noted that Friday's big rally was partly driven by
short sellers buying back shares to cover their bets stocks
will fall, after the U.S. temporarily banned short selling in
almost 800 financial stocks.
On Friday the Dow Jones industrial average <> closed up
368.75 points, or 3.35 percent, at 11,388.44. The Standard &
Poor's 500 Index <.SPX> advanced 48.57 points, or 4.03 percent,
to 1,255.08. The Nasdaq Composite Index <> shot up 74.80
points, or 3.40 percent, to 2,273.90.
Late Sunday in electronic trading, U.S. interest rate
futures <EDc1> were mostly lower on the view the government's
mortgage bailout plan would bring down short-term borrowing
costs.
The price of oil <CLc1> was down 85 cents to $103.70 after
Nigeria's main militant group began a unilateral ceasefire.
Spot gold <XAU=> rose $5.65 an ounce to $876.80.
New Zealand's stock market <>, the first to open the
new week, rose 2.6 percent in early trading.
(additional reporting by Richard Leong)
(Reporting by Kristina Cooke)
