Indications: U.S. stock futures return to losing ways

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By Steve Goldstein, MarketWatch

LONDON (MarketWatch) -- U.S. stock futures declined Monday with traders unwilling to build on Friday's late-session move in the face of worries over global growth.

S&P 500 futures fell 11.7 points to 1,072.90 and Nasdaq 100 futures dropped 18.5 points to 1,800.70. Futures on the Dow Jones Industrial Average dropped 84 points.

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U.S. stocks suffered through a difficult week, with the S&P 500 losing 4.2% despite strength on Friday. Negative sentiment grew after Germany enacted a short-selling ban on German financials, euro-zone bonds and certain credit-default swaps.

"We believe that we are in an environment where investor heroism is not required. While the risk/reward balance is starting to move back in favor of equities, it is not yet time to take the plunge," said David Shairp, a strategist at J.P. Morgan Asset Management.

Ian Harwood, chief economist at U.K. broker Evolution Securities, said traders are too bearish at the moment.

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"At present I think they're fretting far too much about what could go wrong, thereby ignoring what could go right," he said in a note to clients.

"What we're seeing -- and what the markets in their state of funk are currently ignoring -- is a corporate-led recovery taking root, which has an excellent chance of successfully driving a multi-year economic recovery."

With Treasury Secretary Timothy Geithner in Beijing, Chinese President Hu Jintao said China would continue to work toward reforming its currency system, though he didn't announce any concrete measures. Geithner said he "welcomed" the move and he hinted over what was at stake.

"Continued, reliable access to the large and growing United States market is an important underpinning of China's prosperity and growth," Geithner said.

The euro /quotes/comstock/21o!x:seurusd (CUR_EURUSD 1.2382, -0.0163, -1.2993%) was notably weak, hurt after the Bank of Spain rescued a lender over the weekend. See related story.

The shared currency dropped below $1.24.

Most metals futures improved, however, with gold futures up around $8 an ounce, while oil futures traded around the $70-a-barrel mark.

Data on existing home sales for April, due at 10 a.m. Eastern time, are the highlight of an otherwise quiet economics calendar.

Elsewhere, American International Group /quotes/comstock/13*!aig/quotes/nls/aig (AIG 35.96, +1.15, +3.30%) fell 1.8% in premarket trade. The Wall Street Journal reported the U.S. has closed a criminal investigation against AIG without filing any charges. Separately, the U.S. government is preparing for an initial public offering of AIG's Asia arm, AIA, in case the deal to sell the unit to Prudential PLC /quotes/comstock/13*!puk/quotes/nls/puk (PUK 15.02, +0.44, +3.02%) falls through. See AIG story.

BP /quotes/comstock/13*!bp/quotes/nls/bp (BP 43.86, -0.72, -1.62%) fell in London as the oil giant's Gulf of Mexico oil spill faces continued scrutiny. The oil giant has spent $760 million so far on containment costs, the company said Monday.

In Asia, the Shanghai Composite rallied 3.4% on hopes China wouldn't tighten monetary policy too quickly, while the Nikkei 225 dipped 0.3% in Tokyo.

The Stoxx Europe 600 turned lower, falling 0.3% in early afternoon trade.

Steve Goldstein is MarketWatch's London bureau chief.