The committee's co-chairs will issue a statement later Monday, declaring the bipartisan committee was unable to reach a deficit-reduction deal, according to sources, and had failed to bridge deep divides over taxes and spending.

The developments add another degree of uncertainty to a market besieged by global headwinds, although the failure isn't expected to affect the country's credit rating.

In Europe, the FTSE 300 index fell 2.4 percent after Moody's said a recent rise in interest rates on French government debt and weaker economic growth prospects could be negative for the country's credit rating.

Also, Spanish prime minister-elect Mariano Rajoy was under pressure to details his policies to overcome a severe economic crisis after his center-right party won the country's biggest election victory in 30 years.

Adding to market jitters, Chinese Vice Premier Wang Qishan warned the global economy was in a grim state.

Last week, equities suffered their worst week in two months on concerns about debt problems both domestically and in Europe.

Trading volume is expected to be light this week due to the U.S. Thanksgiving holiday on Thursday. The light action could add to market volatility.

The S&P failed to rise above 1,225 on Friday after a drop below it on Thursday triggered massive selling, and it is now strengthening as technical resistance. Last week, the Dow fell 2.9 percent, the S&P dropped 3.8 percent, and the Nasdaq lost 4 percent.

Pharmasset Inc (VRUS) surged 86 percent to $135 in pre-market trading after Gilead Sciences Inc (GILD) agreed to buy the company for $11 billion in cash.GILD fell 3.4 percent to $38.53 before the bell.

Also in merger news, Alleghany Corp (Y) will buy Transatlantic Holdings Inc (TRH) for about $3.4 billion, or $59.79 per share. Transatlantic closed Friday at $54.43.

October existing home sales will be released at 10 a.m. EST (1500 GMT) and are seen falling modestly to 4.8 million units from 4.91 million in the previous month.

Stand by today's recommendations and have a great trading session.