* Moody's cuts France credit rating
* Hewlett-Packard tumbles after results
* Housing starts data expected
* Futures: Dow off 21 pts, S&P off 1.8 pts, up Nasdaq 3.25
By Chuck Mikolajczak
NEW YORK, Nov 20 (Reuters) - U.S. stock index futures dipped
on Tuesday, indicating the S&P 500 index may snap a two-day
rally, after a credit downgrade of France by ratings agency
Moody's and weak earnings by Hewlett-Packard.
The benchmark S&P index had risen more than 2 percent in the
previous two sessions, spurred by optimism a deal could be
reached to stave off the looming U.S. "fiscal cliff," a series
of tax and spending changes next year that could derail the
Moody's Investors Service cut France's sovereign rating by
one notch to Aa1 after the market's close on Monday, citing an
uncertain fiscal outlook as a result of the weakening economy.
While the move was expected after Standard & Poor's issued a
similar downgrade in January, the Moody's decision was a
reminder of the headwinds buffeting the global economy and the
danger of contagion by the euro zone's debt crisis.
"The French lost their top credit rating. That is a negative
not only for Europe but reminds people in the U.S. that all this
talk about overcoming the fiscal cliff is still just talk. If
actions aren't taken, we probably face similar issues here,"
said Rick Meckler, president of investment firm LibertyView
Capital Management in Jersey City, New Jersey.
"The whole European crisis has been one where announcements
as being resolved have been made many times, but concrete steps
have yet to be put in place and the U.S. is at the beginning of
that process, not at the end."
Economic data includes housing starts and permits data for
October at 8:30 a.m. (1330 GMT). Economists in a Reuters survey
forecast a 840,000 annualized rate versus 872,000 in September,
and a total of 865,000 permits compared with 890,000 in the
Hewlett-Packard Co slumped 11.4 percent to $11.79 in
premarket trade after the company posted quarterly revenue that
fell short of Wall Street expectations as its share of the
personal computer market shrank and printer sales declined.
Also in the euro zone, finance ministers will give a
tentative go-ahead for the disbursement of 44 billion euros in
emergency loans to Greece on Tuesday, but the money will only be
paid on Dec. 5 if the country meets all remaining conditions.
The S&P 500 index had fallen 5.3 percent between election
day and the start of the rebound as angst over a possible deal
drove investors to sell stocks limit the impact tax of expected
tax increases on capital gains and dividends.
President Barack Obama and congressional leaders hope to
start serious negotiations after the Thanksgiving holiday on
Thursday on avoiding the "fiscal cliff."
S&P 500 futures fell 1.8 points and were below fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures lost 21
points, and Nasdaq 100 futures added 3.25 points.
At 12:15 p.m (1715 GMT), Federal Reserve Chairman Ben
Bernanke speaks before the Economic Club of New York, a speech
that may offer a fresh chance to gauge the Fed's appetite for
more monetary stimulus. Market participants currently expect the
Fed to step up asset purchases in 2013 after Operation Twist
H.J. Heinz Co edged up 0.3 percent to $58.90 in
light premarket trade after posting higher quarterly earnings,
citing growth in emerging markets and a favorable tax rate.
Campbell Soup Co reported lower quarterly net
earnings, hurt by charges related to its recent acquisition of
Bolthouse Farms, but it stood by its full-year forecast.