Global markets sinking in response to failure of GOP vote

NEW YORK (Reuters) - Stock index futures fell on Friday after lawmakers in Washington delayed a vote on a Republican proposal to raise the U.S. government's debt limit.

House of Representatives Speaker John Boehner's failure to round up enough votes for his plan late Thursday exposed a rift in the Republican Party that is hampering efforts to reach a compromise to raise the U.S. debt ceiling before a Tuesday deadline.

House Republicans are due to meet at 10 a.m. EDT to discuss a way forward.

"The fear factor of the debt ceiling crisis is becoming a major one as we near the deadline," said Peter Cardillo, chief market economist at Avalon Partners in New York. "There is a possibility that we might the test the 1,275 level on the S&P".

On Thursday, the S&P 500 fell for a fourth straight day, closing near 1,300 as buyers kept to the sidelines while lawmakers struggled to hash out an agreement on the deficit and debt ceiling.

S&P 500 futures fell 5.9 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 were down 57 points, and Nasdaq 100 futures gained 7.25 points.

The Commerce Department releases its first estimate of second-quarter gross domestic product (GDP) at 8:30 a.m. EDT. Economists in a Reuters survey forecast a 1.8 percent annualized pace of growth, compared with a 1.9 percent rate in the final first-quarter estimate.

Also at 8:30 a.m., the Labor Department issues the Employment Cost Index for the second quarter. Economists expect a rise of 0.5 percent versus a 0.6 percent rise in the first quarter.

Chevron Corp , the second-largest U.S.-based oil and gas producer, will report second-quarter earnings that are expected to rise as higher prices for oil and robust refining margins helped offset slightly lower total output.

In other economic data, the Institute for Supply Management-Chicago releases July business barometer at 9:45 a.m. EDT. Economists forecast a reading of 60.0 in the month, compared with 61.1 in June.

The Thomson Reuters/University of Michigan Surveys of Consumers July final consumer sentiment index is reported at 9:55 a.m. EDT. Economists look for a reading of 64.0, compared with 63.8 in the preliminary July report.

The euro zone debt crisis is also a concern to markets. Rating agency Moody's put Spain on review for a possible downgrade on Friday, adding to worries that a Greek rescue package has done little to halt the spread of Europe's debt crisis.

Amgen Inc , the world's largest biotechnology company, is expected to post lower profit and revenue as sales of its once top-selling anemia drug Aranesp continues to erode.

(Reporting by Angela Moon; editing by Jeffrey Benkoe)

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