Stock futures hold losses; Iraq overshadows US data

U.S. stock-index futures traded lower on Monday, with risk aversion growing due to geopolitical concerns in Iraq, and to a lesser extent, Ukraine.

Stock futures held their losses after U.S. economic reports, which had manufacturing activity in the New York region holding steady in June after hitting a near four-year high in May, and industrial production up 0.6 percent in May versus a 0.3 percent drop in April.

Other economic reports still expected include the NAHB housing market index.

Over the weekend it was reported that Sunni insurgents in Iraq had made further progress in advancing on Baghdad. There are concerns the conflict may widen beyond Iraq, with reports that Iran has sent 2.000 advance troops to Iraq, and that the White House is preparing to open talks with Iran about how to provide support to the Iraqi government.

The talks are expected to begin this week and mark a rapid move toward rapprochement between Washington and Tehran.

Brent crude oil traded 0.25 percent higher on Monday, with European shares trading lower. Assets perceived as "safe havens" like U.S. Treasury bonds, the U.S. dollar and German bunds were higher.

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Ukraine is also in focus, after talks broke down between Ukraine and Russia over gas prices. Ukraine has missed its Monday morning deadline to settle its gas bill with Russia.

Later in the week, the Federal Reserve will publish its interest rate decision. It is also seen cutting its growth forecast for 2014, given the negative growth recorded in the first quarter. Plus, the Treasury will auction two-year, five-year and seven-year bonds.

Stocks worth watching on Monday include Medtronic, the world's biggest medical devices maker by sales. It announced on Sunday that it would purchase Ireland-based rival Covidien for $42.9 billion in a deal that could increase concerns about U.S. companies striking deals to cut their tax bills.

No major companies are due to report earnings on Monday.