U.S. stock index futures slid amid fiscal stalemate talks

U.S. stock-index futures declined, snapping a weekly gain for equities, as lawmakers continued debates over spending and borrowing plans only three days before the government reaches its debt ceiling.

Standard & Poor’s 500 Index futures expiring in December fell 0.7% to 1,687.2 at 13:00 p.m. in London. The equities gauge rose 0.8% last week amid optimism lawmakers would reach a temporary agreement to increase the debt ceiling for a short period and avoid a default. Futures contracts on the Dow Jones Industrial Average lost 97 points, or 0.7%, to 15,078 today.

The prospect of a U.S. default threatens the U.S. and world economies, International Monetary Fund Managing Director Christine Lagarde emphasized.

“If there is that degree of disruption, that lack of certainty, that lack of trust in the U.S. signature, it would mean massive disruption the world over,” Lagarde said in an interview on NBC. “And we would be at risk of tipping, yet again, into recession.”

The New York Times said that Democrats wanted the sequester, passed into law as part of the deal resolving the last debt-limit impasse, to last only through mid-November. The Wall Street Journal quoted Republican Senate leader Mitch McConnell as saying, “Senate Republicans will not accept anything that undoes these cuts.”

General Motors, which owns a 7% stake in Peugeot, fell 1% to $35.01 in pre-market trading. Peugeot may raise capital with China’s Dongfeng Motor Corp. and the French government buying matching stakes in the car-maker, Reuters reported Oct. 12, citing three unidentified people. Peugeot said today it is examining new cooperation agreements to raise cash for investments and expand outside Europe.

In overseas markets, Europe stocks fell after the release of a weak economic data out of China and as U.S. politicians struggled to make headway on a deal. In Asia, stocks fell for the same reasons. Exports from China fell 0.3% in September from the year-earlier period, marking the weakest performance in three months.