Stock futures lower amid recession worries

The stock market headed for another pullback Monday as investors around the world grow pessimistic about the economic recovery.

U.S. stock futures are down sharply, following the lead of falling stock markets around the world and also extending their losses from last week. Stock investors are taking their cues from the tumbling price of oil, which has dropped to below $64 a barrel on the growing belief that the economy won’t be strong enough to lift demand as much as expected.

Oil had been steadily rising in recent months on growing expectations that the economy was going to be stronger, therefore pushing demand higher.

Last week, oil hit an eight-month high above $73 a barrel. But there have been creeping signs recently that the economy was not as robust as investors hoped. And last week’s weaker than expected reading on consumer confidence and the Labor Department’s report of larger than expected job losses intensified investors’ doubts about a recovery.

A barrel of crude traded at $63.83, down $2.90, in electronic trading ahead of the opening Monday on the New York Mercantile Exchange.

Ahead of the stock market opening, Dow Jones industrial average futures fell 73, or 0.9 percent, to 8,168. Standard & Poor’s 500 index futures fell 8.20, or 0.9 percent, to 885.10, while Nasdaq 100 index futures fell 10.25, or 0.7 percent, to 1,435.

The U.S. markets will be catching up after being closed Friday for the July Fourth holiday. On Thursday, stocks fell sharply in response to the Labor Department employment numbers. The major indexes all dropped more than 2 percent.

Overseas Monday, Japan’s Nikkei stock average fell 1.4 percent. In afternoon trading, Britain’s FTSE 100 was down 1.2 percent, Germany’s DAX index was down 1.5 percent, and France’s CAC-40 was down 1.3 percent.

Investors are anxiously awaiting the start of second-quarter earnings reports. They’re hoping to see if companies’ results and their forecasts for the rest of the year yield clues about the economy. U.S. aluminum giant Alcoa Inc. opens earnings season on Wednesday.

Monday morning, investors will get a reading on the U.S. services sector.

Economists expect a measure of the sector’s health to contract in June at its slowest pace in nine months. The Institute for Supply Management services index, likely totaled 45.5 in June, according to analysts polled by Thomson Reuters. That would be up from 44 in May. Any reading below 50 indicates the services sector is shrinking.

The report is due at 10 a.m. EDT.

In corporate news, a bankruptcy judge says that General Motors Corp. can sell the bulk of its assets to a new company, potentially clearing the way for the automaker to emerge from bankruptcy protection.

Bond prices fell Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.51 percent from 3.50 percent late Thursday. The yield on the three-month T-bill rose to 0.16 percent from 0.15 percent late Thursday.

The dollar mostly gained against other major currencies, while gold prices also rose.