Futures Dive on Swine Flu Fears

Futures indicated a negative open on Monday as fears of a swine flu pandemic spooked investors.

Asian stocks closed lower, with airlines' shares plunging but pharmaceuticals rising, while in Europe markets were also down in morning trade.

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The threat of a flu pandemic rose after more than 100 people were confirmed to have died from the virus in Mexico, which has reportedly spread across the U.S. and as far as New Zealand.

The U.S. declared a health emergency as 20 cases of swine flu have been confirmed in 5 states, including Texas and New York, but no reported deaths.

U.S. health officials are set to ship millions of doses of stockpiled flu medications, like Roche's Tamiflu, but insist this is not a time to panic.

Some pharmaceutical stocks benefited from the flu fears.

GlaxoSmithKline gained more than 3 percent in premarket trading, even after tests showed that its drug Solzira , developed jointly with XenoPort, failed to meet the goals of the Phase 2 study to treat loss of feeling in extremities for diabetes patients. The companies noted the problems may have stemmed from an unusual response rate from placebos.

Glaxo and Switzerland's Roche would be the two main beneficiaries from the need for a swine flu vaccine. Roche traded nearly 9 percent higher in Frankfurt.

Credit Suisse downgraded its weighting on the U.S. to market weight from overweight, citing stocks in country as expensive relative to their peers and that earnings momentum was middling.

In earnings, Verizon shares dropped 2.2 percent though its earnings per share of 63 cents appeared to beat Wall Street estimates.

In corporate news, Chrysler showed signs of progress with its unionized workers on its battle to stay alive on Sunday with just days left to complete deals to slash labor and debt costs or face bankruptcy.

Facing its own June 1 deadline to come up with a plan for deeper and swifter cuts, General Motors announced on Sunday it would hold a news conference on Monday on its revised viability plan. GM shares gained 6.5 percent premarket.

Ahead of the public May 4 release the bank stress test results from the Obama administration, an industry source told CNBC.com that one of the 19 financial institutions that received a government stress test would require additional capital, based on the initial findings.

Growth domestic product data for the U.S. for the first quarter are due later in the week. President Barack Obama's economic advisor Lawrence Summers said on Sunday that the sense of "unremitting freefall" in the country's economy has ended and the picture is no longer negative, but rather mixed.

World finance leaders in Washington agreed over the weekend there was a "break in the clouds" of the economic storm but said more measures were needed to ensure an end to the global recession.

A statement from the International Monetary and Financial Committee of the IMF said more action was needed to restore the health of banks and revive lending.

The Dallas Federal Reserve's Texas manufacturing index for April is due out at 10:30 am New York time, and the Chicago Fed's Midwest manufacturing index for March is out at 12 pm.

Phone company Verizon will report first-quarter earnings before the opening bell Monday, which are expected to be 59 cents per share.

Other big companies to report earnings are appliance maker Whirlpool , chip supplier Qualcomm and smaller companies' earnings include Corning , Humana , DaVita , Plum Creek and XL Capital .

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