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* Fitch cuts Italy credit rating after election impasse
* China data show uneven economic recovery, policy dilemma
* S&P 500 less than 1 pct away from all-time closing high
* Futures: S&P off 2.5 pts; Dow off 12 pts, Nasdaq off 5.5 pts
By Angela Moon
NEW YORK, March 11 (Reuters) - U.S. stock index futures edged lower on Monday following last week's strong rally as Italy's credit downgrade and mixed data from China curbed investors' appetite for risky assets.
* On Friday the S&P 500 climbed for a sixth straight day, putting it less than 1 percent from an all-time closing high. On a weekly basis, it rose for the ninth week out of the last 10. All three major U.S. stock indexes racked up their biggest weekly gains since the first week of the year.
* European shares dipped in morning trade as investors digested a credit downgrade for Italy and on-going political uncertainty in Rome.
* China's uneven economic recovery signals a looming dilemma for policymakers as official data released at the weekend showed inflation at a 10-month high in February while factory output and consumer spending were weaker than forecast.
* S&P 500 futures fell 2.5 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 12 points, and Nasdaq 100 futures lost 5.5 points.
* M&A noise will remain at the forefront of investors minds, with the Times of India newspaper reporting that AT&T Inc is considering buying a 25 percent stake in India's Reliance Jio Infocomm Ltd, a telecommunications venture controlled by billionaire Mukesh Ambani, for $3.5 billion.
* Merck & Co will be in the spotlight after data released on Saturday showed unexpected serious side effects arose in a huge study of a long-acting niacin drug aimed at raising good HDL cholesterol, possibly adding another nail to the coffin of niacin therapy for heart patients.
* Wall Street commodity revenues crashed last year to their lowest on record, as tighter regulation and limited price swings squeezed the once dominant traders of Goldman Sachs Group Inc , JPMorgan Chase & Co and Morgan Stanley.
* U.S. stocks closed out a historic week with another day of gains on Friday, as the Dow hit yet another record closing high on a payrolls report that surpassed even the most optimistic forecasts.