US stock futures signal lower open; oil drops

NEW YORK, May 22 (Reuters) U.S. stock futures pointed to a lower open on Wall Street on Monday, with investors on edge due to concerns about inflation and higher interest rates.

The sell-off across global equity and commodity markets in Europe and Asia appeared likely to weigh on sentiment, and may cause U.S.

stocks to seen another turbulent week, analysts said.

''The world is not coming to an end, but maybe euphoria is coming to an end,'' said Andre Bakhos, president of the Princeton Financial Group.

Chances the Federal Reserve would interrupt its campaign of raising rates have diminished as markets have become increasingly worried about inflation, he said.

''Investors have been whistling past the graveyard for a while, thinking the pause from the Fed was nigh, but that prospect has now been moved into the future.'' S&P 500 futures were down 5 points, 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 declined 40 points, and Nasdaq 100 futures were down 5 points.

The rush for the exit out of equities and a drop in commodities such as oil sent U.S. Treasury prices higher as investors eyed the safety of fixed income assets.

Besides oil, prices of copper, gold and silver fell sharply in world markets on Monday. Investors fear that rising inflation would hurt economic growth and stall four years of double-digit earnings growth.

Bakhos said he expected little help for the market from the New York Stock Exchange's bid of 8 billion euros (.2 billion) for Euronext, which the NYSE Group Inc. unveiled on Monday.

''I don't believe that attempted purchase has any bearing on the sentiment,'' he said.

U.S. crude for June delivery fell 70 cents to .83 in electronic trading, while volatile gold prices fell 3.5 percent to their lowest in nearly four weeks.

On Friday, U.S. stocks ended slightly higher, and the Nasdaq narrowly averted a slide that would have taken it to its longest losing streak in 22 years, as investors bought beaten-down stocks.

REUTERS CS PM1731