* Futures lower; GM shares fall in Europe
* Data still on tap: consumer sentiment, Chicago PMI
* Dow headed for worst month since 1987
* But Wall St set to end higher for week
(Updates with personal spending data)
By Kristina Cooke
NEW YORK, Oct 31 (Reuters) - U.S. stock index futures
slipped on Friday, with the Dow headed for its worst month in
more than two decades, on more evidence of the deep economic
slowdown and after sources said the General Motors-Chrysler
merger is on hold.
In Asia and Europe shares were on track for their biggest
monthly declines ever as Japan's interest rate cut failed to
erase concerns about the deteriorating global economic
outlook.
GM's shares fell about 5 percent in premarket trading after
three people with direct knowledge of talks told Reuters a deal
to merge the U.S. automaker and Chrysler LLC hit an impasse
after the Bush administration ruled out funding for it.
Technology shares could be under pressure after Intel Corp
<INTC.O> said in a regulatory filing that the recent financial
crisis could have a negative impact on its chipmaking business,
results of operations and financial condition. Intel shares
fell more than 2 percent before the bell.
Friday's economic data provided further evidence of a deep
slowdown. U.S. consumers cut their monthly spending for the
first time in two years during September, evidently bracing for
hard times as jobs continue to disappear and credit conditions
tighten. Economic reports still on tap include consumer
sentiment data and Chicago-area manufacturing data.
But Friday's weakness follows a positive week for stocks,
in which investors began to tiptoe back into the market to
scour for bargains.
"There is a tug of war between those who see valuations
that are attractive and those that focus on that we are going
into a pretty bad recession. The data this morning helped set
the tone," said Craig Peckham, equity trading strategist at
Jefferies & Company in New York
"This morning's corporate news exemplifies the uncertainty
that is out there. The question is what is the magnitude going
to be and how long it will be before things start to rebound."
S&P 500 futures <SPc1> fell 8.10 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 <DJc1> slipped
41 points, and Nasdaq 100 <NDc1> futures dropped 20 points.
With one trading session left in October, the Dow is down
15.39 percent for the month, putting it on track for worst
month since October 1987.
Video game publisher Electronic Arts <ERTS.O> added to
jitters about the corporate earnings picture after it slashed
its full-year profit forecast due to slowing demand at retail
stores, driving its stock down 14 percent after hours on
Thursday.
Cummins Inc <CMI.N>, a U.S. maker of engines and power
generators, said quarterly earnings rose 24 percent as strong
overseas growth overshadowed weakness in North America.
But Chevron Corp's <CVX.N> third-quarter profit more than
doubled, the oil companies said, as high oil prices and healthy
margins at its refineries boosted its bottom line.
Google Inc <GOOG.O> and Yahoo Inc <YHOO.O> will also be in
the spotlight after The Wall Street Journal reported they could
announce a decision to walk away from their search deal by the
middle of next week. The Journal cited people familiar with the
matter.
Federal Reserve Chairman Ben Bernanke is due to speak on
mortgage finance before the Symposium on the Mortgage Meltdown,
the Economy and Public Policy at the University of California
at Berkeley.
(Editing by Kenneth Barry)
