MARKET SNAPSHOT: U.S. Stocks: Futures Drop On Gaza, Russia Headlines

By Barbara Kollmeyer, MarketWatch

MADRID (MarketWatch) -- Stock futures fell Monday, as investors took in news of a deadly weekend in the Israel-Palestinian conflict and of potentially tougher sanctions from Europe against Russia in the wake of the downing of a Malaysia Airlines passenger jet.

Futures for the Dow Jones Industrial Average (DJU4) lost 41 points, or 0.3%, to 16,990, while those for the S&P 500 index (SPU4) fell 4.9 points to 1,966.70. Futures for the Nasdaq-100 index (NDU4) dipped 4.75 points to 3,925.50

"We are seeing a push toward more defensive sectors [in Europe] and expect that to follow suit when U.S. markets open," said Brenda Kelly, chief market strategist at IG .

There are no economic events for Monday and a scant amount of earnings, leaving investors to face down a weekend of rising global tensions. On Sunday, Secretary of State John Kerry was caught on an open microphone, ahead of interviews with Sunday talk shows, criticizing Israeli's Gaza operation after the deadliest day of fighting for both sides since the conflict began.

European threats of tougher sanctions against Russia weighed on stocks in the region and filtered through to U.S. stock futures as well. In an interview on NBC's "Meet the Press", Kerry said a "buildup of extraordinary circumstantial evidence" is pointing to Russia as the source of the missile that shot down Malaysia Airlines Flight 17 over Ukraine, killing 298 people.

International anger is growing over the inability of experts to reach the crash site, as bodies languish in railcars without any clear plan as to destination. Kerry described what was happening as "grotesque," referring to reports of "drunken separatist soldiers, unceremoniously piling bodies onto trucks", and removing bodies and evidence from the site.

European stocks stayed under pressure, and Russia's blue-chip MICEX index was down 1.6%, dipping below the key 1,400 area, and could be en route to closing below that level for the first time since mid-May, according to FactSet. Asian markets closed mixed.

Wall Street stocks finished last week higher, despite volatility. The S&P 500 (SPX) and the Dow industrials (DJI) finished the week up 0.5% and 0.9%, respectively. The Russell 2000 (RUT) lost 0.7% for the week, and analysts said investors will be watching for more pain there. Gold (GCQ4) moved higher, while oil (CLQ4) was also marginally up. Small caps' slump, Ukraine fears may hold up market

Earnings reports

This is also a major week for earnings. Among the heavy hitters, Apple Inc. (AAPL) will report Tuesday, and Boeing Co. (BA) and Facebook Inc. (FB) will report Wednesday.

Hasbro Inc.(HAS) eased slightly in premarket after the toymaker posted an 8% rise in revenue, but missed revenue estimates. Halliburton Co.(HAL) rose 1.5% after the oil services company's revenue beat forecasts and as earnings met expectations.

Also getting a lift in premarket, shares of EMC Corp.(EMC) jumped 15% on reports Elliot Management Corp. has taken a stake of more than $1 billion in the data-storage giant and plans to push it toward a breakup.

Results from Netflix Inc. (NFLX)(NFLX),Texas Instruments Inc. (TXN) and Chipotle Mexican Grill Inc. will come after the close of regular trading. Netflix, Chipotle, TI are Monday's stocks to watch

Joao Monteiro, analyst at Valutrades, said that Monday could mark a period of consolidation for markets after last week's gains. "More international action in an attempt to shift the geopolitical agenda is inevitable, but the real uncertainty hangs over the timing," he said in emailed comments.

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