Stock futures point to sharp losses at the open, with blue chips heading to close out their worst monthly point decline in at least a year and a half; Dow -1%, S&P -0.9%, Nasdaq -0.4%.
The early losses stem from sharp declines in Europe after data showing a return of record-low inflation in the euro zone stoked deflation fears; early gains in emerging market currencies faded, with the Turkish lira, South African rand, Hungarian forint and Russian ruble weakening.
A string of disappointing earnings from the likes of Mattel (-9%) and Amazon (-6.5%), plus a profit warning from Wal-Mart (-1%), aren't helping; Google also reported an earnings miss but shares +4% as investors focus on an increase in click revenue.
In U.S. economic data, Dec. consumer spending rose a better than expected 0.4% but personal income was unchanged.
Treasurys are near their highs, with the 10-year yield down nearly 5 bps at 2.65%.
Still ahead: Chicago PMI, consumer sentiment.