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* Equity cash, index futures markets closed due to storm
* Revenues from U.S. companies disappoint
* Traders eye political risks in Europe
* Futures down: Dow 69 pts, S&P 4.9 pts, Nasdaq 15.75 pts
By Edward Krudy
NEW YORK, Oct 29 (Reuters) - U.S. stock index futures fell in a shortened session on Monday and cash equity trading was canceled as powerful Hurricane Sandy bore down on the U.S. East Coast while renewed uncertainty in Europe hurt sentiment.
All U.S. stock markets were closed on Monday and may remain closed on Tuesday, the operator of the New York Stock Exchange said, depending on the damage from the huge and dangerous storm on financial center New York City overnight and on Tuesday. Index futures stopped trading electronically at 9:15 a.m. (1315 GMT) and will stay shut until further notice.
Sandy, a mammoth storm, took aim at the most densely populated U.S. Northeast Coast on Monday, forcing hundreds of thousands to seek higher ground, halting public transport and closing schools, businesses and government departments.
Italian political turmoil and Spanish hesitancy over seeking euro zone assistance put the two countries on the front line of the region's debt crisis and back under market pressure on Monday as their leaders met in Madrid.
"We have an illiquid market, we have a risk-off situation from overseas and we have some issues going on in the States with Sandy, so that is impacting things a little more than expected," said David Lutz, managing director of trading at Stifel Nicolaus Capital Markets in Baltimore.
Lutz was tracking markets from his home in Annapolis, Maryland, a coastal town near Washington D.C. that is expected to escape the worst of the storm surge as Sandy makes landfall further north.
"I do have a lot of customers that are still in, whether they're in New York City or overseas," he said. "I think a fair amount of people are probably logging in from home just because at this point in time there's a lot of information gathering for us U.S. traders," he said.
S&P 500 futures fell 4.9 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 fell 69 points and Nasdaq 100 futures fell 15.75 points.
Futures closed well off their lows of the session when S&P 500 futures fell more than 10 points. Futures will not reopen as usual during the day, including the popular S&P 500 e-mini contract that allows smaller traders to access index futures.
Frank Lesh, a futures trader at FuturePath in Chicago, said he is expecting his day to be much quieter than usual as the e-mini is his firm's biggest contract, but he is continuing to trade other futures contracts such as copper, soybeans and grains.
"I guess it's going to be a quiet day," said Lesh. "We don't know if we're going to reopen tonight. I guess they're going to follow the lead of New York."
E-mini contracts typically trade around the clock, closing for just 45 minutes of each day.
If the market closure continues for more than a day it may start causing problems for investors who need to trade in and out of positions, investors said.
"If you go two days, you really start to create some serious financial stress for some players that need to get something done," said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis. "A two-day closure will create more stress and therefore will allow electronic trading. That's my best guess."
CME Group closed its interest rate operations, including Treasury, Eurodollar and fed funds futures and options on futures markets on the trading floor at 12:00 noon on Monday in line with a closure of the cash market.
In Europe, Spanish and Italian bond yields rose and German Bund futures hit two-week highs on Monday, partly prompted by former Italian Prime Minister Silvio Berlusconi's threat to bring down the Rome government.
Greece's foreign lenders have refused to make any further concessions on changes to labor laws contested by a junior coalition partner, the country's finance minister said on Sunday, prolonging an impasse on a crucial austerity package.
Athens has been locked in talks with its EU and IMF lenders on the austerity package for months, but a final agreement has been held up by the small Democratic Left party's refusal to back the new wage laws.
Weaker revenues have been a concern this U.S. earnings season. Just 36.9 percent of S&P 500 companies so far have reported revenue that beat forecasts, compared with the 62 percent that typically exceed expectations, according to Thomson Reuters data as of Friday.
Stocks slid last week, following a series of weak results, especially from U.S. multinational companies. For the week, the Dow fell 1.8 percent, the S&P 500 lost 1.5 percent and the Nasdaq dropped 0.6 percent.
The S&P 500 index is off nearly 4 percent since a peak in September and the index has fallen below its 50-day moving average, a closely watched momentum indicator. Some analysts are now looking to the 100-day moving average as the next area of support at 1,396.8. The index closed at 1,411.94 on Friday.
European shares fell for the first time in four sessions on Monday, hit by worries over weak company results. The FTSEurofirst 300 index fell 0.4 percent to 1,093.23 points and the euro zone's blue-chip Euro STOXX 50 index fell 0.7 percent to 2,477.62 points.
Canadian ETFs traded in Toronto that hold U.S. equities or are exposed to U.S. indexes, such as the Horizons S&P 500 Index C$ Hedged ETF, are available to trade. Some ETFs will be ineligible for subscriptions or redemptions. Horizons ETF warned that the bid/ask spread could be abnormally wide.