NEW YORK (CNNMoney) -- U.S. stocks were headed for a lower open Monday as worries about Europe remained at the forefront ahead of a key meeting of continent leaders later in the week.
Dow Jones industrial average (), S&P 500 ( ) and Nasdaq ( ) futures were all lower. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.
All eyes will be firmly fixed on Europe this week, which culminates with a key two-day EU summit starting Thursday. Expectations are running high for leaders to put together a concrete plan.
European leaders from Germany, France, Italy and Spain said Friday that they had agreed on a set of growth-enhancing policies equal to about €125 billion, or 1% of eurozone gross domestic product.
Early Monday, Spain formally requested aid for its banking sector, as expected.
The country has been struggling under a pile of debt and worries that it might need a bailout, as yields on the Spanish 10-year bond recently flirted with 7% -- a level that flashes warning signs about a country's debt level. Yields have since retreated to around 6.5% but Spain remains on shaky ground.
"If you didn't really want to buy Spanish bonds, you certainly don't want to after this formal request," said Elisabeth Afseth, a fixed income analyst with Investec in London.
Additionally, Cyprus was hit Monday with a downgrade by credit ratings agency Fitch. Cyprus could soon become the latest, and smallest, member of the euro currency union to request a bailout from the European Union.
In the United States, the government will release figures for new home sales in May. The Supreme Court could also announce a ruling on President Obama's health care reform law.
U.S. stocks closed higher Friday, one day after fears of slow growth and bank downgrades sent them spiraling downward.
World markets: European stocks were in the red in afternoon trading. Britain's FTSE 100 ( ) slid 0.7%, the DAX ( ) in Germany dropped 1.8% and France's CAC 40 ( ) lost 2%.
Asian markets ended lower. The Shanghai Composite () stumbled 1.6%, the Hang Seng ( ) in Hong Kong shed 0.5% and Japan's Nikkei ( ) fell 0.7%.
Economy: New home sales for May are expected to come in at an annualized rate of 350,000, according to a survey of analysts by Briefing.com, up from 343,000 in the prior month.
Companies: Shares of Parsippany, N.J.-based Watson Pharmaceuticals ( ) were up more than 2% in premarket trading on news that U.S. drug regulators gave it permission to produce generic forms of Adderall XR. Until now, Ireland's Shire ( ) has been the only producer of the drug, administered to those diagnosed with attention deficit hyperactivity disorder. The Food and Drug Administration's recent approval means the entrance of Watson as a new competitor.
Oil for August delivery fell 86 cents to $78.90 a barrel.
Gold futures for August delivery rose $1.90 to $1,568.80 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 1.62% from 1.67% late Friday.
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