Oct. 27 (Bloomberg) -- U.S. stock futures fell, indicating the market may extend the worst monthly plunge in 70 years, as concern the global economic slowdown is deepening overshadowed speculation the Federal Reserve will cut interest rates.

Futures pared declines after Bill Gross, manager of the world's biggest bond fund, told CNBC the Federal Reserve's purchase of commercial paper will help reduce borrowing costs.

Standard & Poor's 500 Index futures expiring in December declined 12.2, or 1.4 percent, to 853.8 at 9:15 a.m. in New York after slumping as much as 4.7 percent earlier. Dow Jones Industrial Average futures fell 44, or 0.5 percent, to 8,217. Nasdaq-100 Index futures retreated 6, or 0.5 percent, to 1,185.5.

Europe's Dow Jones Stoxx 600 Index slid 3.4 percent, while the MSCI Asia Pacific Index lost 6.3 percent. The MSCI Emerging Markets Index tumbled 3.7 percent as Hungary's BUX Index slid 7.4 percent and China's CSI 300 Index sank 7.1 percent. The dollar and Treasuries climbed.

``The financial crisis is spreading and the reach of the developed world's recession appears to be broadening,'' said Doug Peta, New York-based market strategist at J&W Seligman & Co., which manages about $15 billion.

U.S. stocks plunged last week, driving the S&P 500 toward the steepest monthly loss since 1938, on concern the seizure in credit markets will curb earnings more than analysts anticipated at industrial, consumer and technology companies.

Reports this week may show the U.S. economy shrank last quarter for the second time in a year as consumers and companies retrenched. Futures on the Chicago Board of Trade show a 46 percent chance the Fed will lower its target for overnight bank loans, now 1.5 percent, by 75 basis points. That's up from no chance a week ago. Odds for a half-point cut are 54 percent.

``A cut would send a positive signal that the Fed remains vigilant in keeping the financial system fluid and flooded with money as the credit markets thaw,'' said Mark Luschini, who oversees $1 billion as chief investment officer at Parker Hunter Asset Management in Pittsburgh.

To contact the reporters on this story: Jeff Kearns in New York at jkearns3@bloomberg.net; Michael Patterson in London at mpatterson10@bloomberg.net.

Last Updated: October 27, 2008 09:16 EDT