Futures fall on AIG record loss : US Business

By Jennifer Coogan

NEW YORK (Reuters) - Stock index futures fell on Friday, with financial stocks poised to decline after American International Group , the world's largest insurer, posted a larger-than-expected record loss.

Equity markets overseas were pushed lower as the price of oil topped $125 a barrel. Tokyo's main index lost more than 2 percent and Europe's broad benchmark was down by nearly the same amount.

Shares of AIG fell 8.3 percent to $40.50 before the opening bell. The company had to write down assets linked to subprime mortgages and said it would raise $12.5 billion to strengthen its balance sheet.

Another major financial company, Citigroup Inc , plans to sell roughly $400 billion on non-core assets, people familiar with the situation said.

Shares of Citigroup were down 2.1 percent to $23.80 in pre-market trading.

AIG "rekindles fears about the credit markets and that we are not through with the write-downs," said Jim Awad, chairman of W.P. Stewart Asset Management in New York. "On top of that, you have got Citi selling assets, which in the long run is a good thing, but it implies several more years of turmoil and restructuring."

S&P 500 futures were down 7.3 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 fell 84 points, and Nasdaq 100 futures slipped 10 points.

Semiconductor shares may lag after graphics chip maker Nvidia Corp posted quarterly earnings and gross margins that missed estimates. Nvidia shares were down 3 percent at $21.29 before the open.

On Thursday, the Dow Jones industrial average <.DJI>finished up 52.43 points, or 0.41 percent, at 12,866.78. The Standard & Poor's 500 Index <.SPX> ended up 5.11 points, or 0.37 percent, at 1,397.68. The Nasdaq Composite Index <.IXIC>gained 12.75 points, or 0.52 percent, to close at 2,451.24.

(Editing by Kenneth Barry)

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