US STOCKS-Futures fall as risk aversion returns23:14, Wednesday,...

US STOCKS-Futures fall as risk aversion returns
23:14, Wednesday, 10 January 2007

By Jennifer Coogan

NEW YORK, Jan 10 (Reuters) - U.S. stock index futures
pointed to a weaker market open on Wednesday as a drop in Latin
American shares prompted investors to reassess riskier assets.

In addition, energy shares such as Exxon Mobil Corp.
and Chevron Corp. could see pressure as oil
extended sharp declines and drop in European shares to two-week
lows, led by tech stocks, could spill over to U.S. markets.

The sell-off in Latin American shares on Tuesday came after
Venezuelan President Hugo Chavez said he would seek to
nationalize utilities and telecommunication companies.

"The main pressure today is really coming from lower levels
in Europe. All that started with the Chavez news, which really
casts a dark cloud on emerging markets and again made people
think whether riskier assets, which did great in 2006, might
get their comeuppance in 2007," said Rick Meckler, president of
LibertyView Capital Management in Jersey City, New Jersey.

With riskier assets, such as some tech shares, emerging
markets or high-yield bonds "there's a little fear that you may
be playing musical chairs and get stuck without a seat when the
music stops," Meckler said.

S&P 500 futures were down 5.2 points, far below fair
value, a mathematical formula that evaluates pricing by taking
into account interest rates, dividends and time to expiration
on the contract.

Dow Jones industrial average futures fell 32 points,
and Nasdaq 100 futures slipped 10.75 points.