US STOCKS-Default concerns grow as debt deadline looms
* Some progress, but no clear sign of end to fiscal impasse
* Unexpected drop in exports from China weigh on global equities
* Futures off: Dow 97 pts; S&P 11.3 pts; Nasdaq 12.75 pts
NEW YORK, Oct 14 (Reuters) - U.S. stock index futures sank on Monday after weekend talks between Republicans and Democrats failed to conclude an agreement to reopen the federal government and raise the limit on federal borrowing authority, which will be reached in three days.
The lack of a definitive agreement was putting pressure on equities as there were no guarantees an historic debt default would be avoided. The government shutdown, entering its third week, was seen as a drag on the economy.
Senate Majority Leader Harry Reid and Republican leader Mitch McConnell held talks that Reid later called "substantive." Reid did not provide details, but his remarks gave some hope that Congress soon might pass legislation to fund the government and raise its borrowing authority.
Both the Senate and House are scheduled to be in session on Monday, even though it is the Columbus Day federal holiday. With no economic data and major earnings due on Monday, Washington was at the center of focus for all markets.
"We may have another day or two before the agreement, but I don't think we would go down to technical default. So as much as the market may be focused on the Washington for now, I think it will quickly shift back to looking at the economic fundamentals, earnings and the longer-term parade," said Peter Cardillo, chief market strategist at Rockwell Global Capital in New York.
Also pressuring the market was trade data from China, which showed an unexpected decrease in exports in September for the weakest performance in three months. Another set of data showed Chinese consumer prices rose faster than expected in September.
S&P 500 futures fell 11.3 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 fell 97 points and Nasdaq 100 futures lost 12.75 points.
U.S. stocks had risen strongly ahead of the weekend on hopes a deal to raise the $16.7 trillion federal borrowing limit was near. Failure to raise the debt ceiling would leave the world's biggest economy unable to pay its bills in the coming weeks.
International Monetary Fund managing director Christine Lagarde, speaking in Washington, warned of "massive disruption" to the global economy if the U.S. debt ceiling, which will be reached on Thursday, was not lifted.