NEW YORK (Reuters) - Stocks were poised for a slightly lower open on Monday, indicating the S&P 500 would extend losses after suffering its worst drop since mid-November on continued worry legislators will be unable to reach a deal to avert the "fiscal cliff."
The benchmark S&P index <.SPX> declined 0.9 percent on Friday, its biggest percentage drop since November 14, as a Republican plan to avoid the cliff - $600 billion in tax hikes and spending cuts that could tip the U.S. economy into recession - failed to gain any traction on Thursday night.
Some U.S. lawmakers expressed concern on Sunday the country would go over the cliff, as some Republicans charged that was President Barack Obama's goal. Talks are stalled with Obama and House of Representatives Speaker John Boehner out of Washington for the holidays.
"It's all fiscal cliff, all 24/7 now, this will continue to erode confidence and continue to cause problems," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
"I am sure they will come up with some patch like they always do, then they will kick the can and extend and pretend, and do it again later. But it's concerning that they can't get their stuff together."
Congress is expected to return to Washington next Thursday as Obama returns from a trip to Hawaii. As the deadline draws closer, a 'stop-gap' deal appears to be the most likely outcome of any talks.
S&P 500 futures fell 3.4 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 31 points, and Nasdaq 100 futures declined 4 points.
Trading volumes are expected to be muted, with U.S. equity markets scheduled to close at 1 p.m. (1800 GMT) ahead of the Christmas holiday on Tuesday.
In addition, a number of European markets will operate on a shortened session, with other markets closed entirely.
U.S. retailers may not see a sales surge this weekend as ho-hum discounts and fears about imminent tax hikes and cuts in government spending give Americans fewer reasons to open their wallets in the last few days before Christmas.
Aegerion Pharmaceuticals Inc
(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama)
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