* Futures frozen after sharp dive
* Concern over health of global economy fuels drop
* Worries over corporate profit outlook weigh
(Adds details, quotes)
By Leah Schnurr
NEW YORK, Oct 24 (Reuters) - U.S. stock index futures
tumbled so sharply on Friday that they had to be frozen at
several points as global markets tumbled on signs the global
economy is in the throes of recession.
Stock markets were in freefall around the world as panicked
investors moved to liquidate risky positions. Japan's Nikkei
index <> ended down 9.6 percent and European shares lost 8
percent. For more see [].
By 8:00 a.m. in New York (1200 GMT) December Dow Jones
futures <DJZ8> were down 6.3 percent, Standard & Poor's 500
futures <SPZ8> were off 6.6 percent and Nasdaq 100 futures
<NDZ8> were down 6.8 percent.
All three contracts lost the maximum amount permissible
before the start of futures trading in the United States.
Both the New York Stock Exchange and Nasdaq said trading
would open as normal at 9:30 a.m. (1330 GMT). [].
"The markets are basically following grim news that's
coming out of the global economy ... It's basically feeding on
itself," said Peter Cardillo, chief market economist at Avalon
Partners in New York, adding "... right now the markets are in
the process of discounting a global recession and how severe
it's going to be."
According to Reuters data, December S&P futures hit a low
of 855.20, while Dow Jones futures touched a low of 8,224 --
the lowest levels at which both contracts could trade in a
session. The Nasdaq fell to 1,168.50.
Jeremy Hughes, a spokesman for the Chicago Mercantile
Exchange in London, said both contracts were "limit down."
"The limit is calculated at roughly 5 percent down. At that
point it can't go any further down but it is still accessible
and can go up again," he said.
"When the U.S. futures open in Chicago (at 9.30 EST), the
contract becomes available again, so (it could go) further down
another 5 percent down, so 10 percent in total," he added.
Financial shares were poised to see deep losses, with bank
shares <XLF.A> tumbling 6.1 percent before the bell, but
selling looked likely to be indiscriminate across all sectors
as investors move to raise cash.
A cascade of profit warnings from major Asian companies
slammed Tokyo's Nikkei during its Friday session, sending it
down more than 9 percent. European equities fell by almost 10
percent at one point to hit their lowest since May 2003.
Heightening worries of a recession, data showed the British
economy shrank 0.5 percent in the third quarter, the first
contraction in 16 years and substantially more than expected.
[].
"I think that's the first sign that GDP (gross domestic
product) across the world is probably going to turn negative in
the third quarter and we're going to see it in many, if not
most, countries," said Paul Mendelsohn, chief investment
strategist at Windham Financial Services in Charlotte, Vermont,
describing the dive in U.S. stock futures as "panic".
Bringing fears to a head, China said its outlook was grim
while major global companies issued profit warnings.
[].
Data on September U.S. existing home sales is due out at 10
a.m. (1400 GMT).
(Additional reporting by Amanda Cooper in London; Editing by
James Dalgleish)
