Stocks set for an ugly start

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NEW YORK (CNNMoney) -- U.S. stocks were headed for an early sell-off Monday, as investors fret over weak domestic economic data and Europe's debt crisis, while bracing for second-quarter corporate results.

Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were all lower ahead of the opening bell. Futures measure current index values against perceived future performance.

The three major indexes posted modest gains last week. Positive reports on initial claims and hiring initially boosted optimism about the labor market. But when the government's June jobs data came in far worse than expected, stocks ended Friday's session with a thud.

The U.S. economy created only 18,000 jobs last month -- a fraction of the 120,000 new jobs that a CNNMoney survey of 27 economists had forecast.

Peter Cardillo, chief market economist at Avalon Partners, said worries over European debt and the risk of a broad economic slowdown will dominate Monday's session.

"Contagion fears are a negative for euroland," Cardillo said. "And combined with our own weak economic data, we are seeing jitters at the open."

Economy: Investors will be keeping a close watch on the eurozone debt crisis, and especially Italy, the region's latest problem child.

In Washington, lawmakers will resume talks to raise the debt ceiling, and President Obama is scheduled to hold a news conference on the issue Monday morning.

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Companies: Dow component Alcoa (AA, Fortune 500) will be the first major company to release quarterly results, due out after the closing bell Monday. Analysts polled by Thomson Reuters expect the aluminum maker to post earnings per share of 32 cents on revenue of $6.31 billion.

World markets: European stocks dipped in morning trading. Britain's FTSE 100 was off 0.3%, the DAX in Germany lost 1.0% and France's CAC 40 declined 1.4%.

Asian markets ended mostly lower. The Hang Seng in Hong Kong dropped 1.7% and Japan's Nikkei lost 0.7%. The Shanghai Composite was the lone bright spot, increasing 0.2%

Currencies and commodities: The dollar strengthened against the euro, the Japanese yen and the British pound.

Oil for August delivery slipped $1.25 to $94.95 a barrel.

Gold futures for August delivery rose $2.60 to $1,544.10 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield down to 3.02% from 3.15% late Friday.