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Futures Dip in Summer Lull

U.S. stock index futures pointed to a lower start for Wall Street, but markets could see big swings in what's likely to be a week of lower volumes as the summer winds down.

Volumes on the European markets were low with the UK closed for a bank holiday. Asian stocks closed higher as the drop in oil lifted exporter shares, but European markets were in the red in thin morning trade.

Oil rose above $115 as some traders saw buying opportunities in the crude price's biggest one-day fall since 2004 on Friday, while the dollar hit a two-year high against the pound as fears that the UK economy would slid into recession heightened.

Worries that the credit crunch is far from over continue to haunt markets, with investors increasingly believing in the likelihood of a federal bailout of home-funding giants Fannie Mae and Freddie Mac.

Adding to the agitation, Indiana sued Countrywide Financial, becoming the latest state to take the mortgage lender to court over its lending practices.

In other parts of the economy, car makers plan to urge Congress to support funding up to $50 billion in low-interest loans over three years to help them modernize their assembly plants and develop next-generation fuel-efficient vehicles, with representatives of the industry insisting this is not a bailout but a response to the new market conditions.

Investors will be keen to see existing home sales data, due at 10 am New York time, hoping for signs of a recovery in the housing market. They are expected to have risen slightly to 4.9 million in July on an annualized basis from 5.86 million, according to Briefing.com.