By Kristina Cooke and Dan Burns
The dollar weakened against the yen on concerns that government borrowing will exacerbate the U.S. budget deficit as it needs to issue more debt to finance its rescue plan to buy bad mortgages from financial institutions.
Negotiations between Congress and U.S. Treasury Secretary Paulson ratcheted up over the weekend after the administration and U.S. congressional leaders began swapping proposals.
S&P 500 futures
The drop in stock index futures came on the heels of Friday's massive rally in stocks worldwide -- the largest ever one-day advance as measured by market value. The MSCI main world equity index <.MIWD00000PUS> added more than $1.5 trillion in value on the day.
Robert Loest, senior portfolio manager at Integrity Mutual Funds in Minot, North Dakota said the drop in futures was a combination of short-term profit-taking and second-guessing how the bailout plan will ultimately be come out.
"Congress hasn't written the legislation and the devil is in the details. The taxpayers are on the hook for an awful lot of money," Loest said.
The dollar was little changed against the euro but weakened against the Japanese yen in early trading as Asian markets opened the week. It last crossed at 1.4459 euro compared with 1.4464 late Friday and at 106.95 yen versus 107.42 on Friday.
"This is partially people looking at the plan and trying to figure out what it all means. I don't know the plan is a save all," said Joe Saluzzi, partner at Themis Trading in Chatham, New Jersey.
"It may have stopped us from the death spiral, but equities in general are still going to have a tough time. You still have to pay the piper -- where are the earnings, unemployment."
Saluzzi noted that Friday's big rally was partly driven by short sellers buying back shares to cover their bets stocks will fall, after the U.S. temporarily banned short selling in almost 800 financial stocks.
On Friday the Dow Jones industrial average <.DJI> closed up 368.75 points, or 3.35 percent, at 11,388.44. The Standard & Poor's 500 Index <.SPX> advanced 48.57 points, or 4.03 percent, to 1,255.08. The Nasdaq Composite Index <.IXIC> shot up 74.80 points, or 3.40 percent, to 2,273.90.
Late Sunday in electronic trading, U.S. interest rate futures
The price of oil
New Zealand's stock market <.NZ50>, the first to open the new week, rose 2.6 percent in early trading.
(additional reporting by Richard Leong)
(Reporting by Kristina Cooke)