CORRECTED - US STOCKS-Wall St set for slide on oil, housing, credit 26 Jul 2007 21:17

(Corrects oil contract in second paragraph to September instead of July) (Rewrites first paragraph, adds European shares falling, Black & Decker earnings disappoint, update prices)

By Ellis Mnyandu

NEW YORK, July 26 (Reuters) - U.S. stocks headed for a sharply lower open on Thursday as worries about a rise in oil prices, housing slump and worsening climate for financing corporate takeovers drove a global sell-off in shares.

U.S. crude for September rose to $77.24 in electronic trade, stoking concern about the toll of higher energy prices on personal spending as consumers grapple with a stalled housing market.

News from home builders rattled the market early, while a report showing a smaller-than-expected increase in June durable goods orders added to jitters.

Investors worried about the climate for deal financing after Chrysler Group postponed a $12 billion loan to finance a private equity takeover of the company from DaimlerChrysler AG. <DCXGn.DE>.

"The overriding issues in the market today are higher oil prices and funding issues with regard to low-quality debt," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.

"The markets will focus more on credit and oil and we'll see some weakness today."

S&P 500 futures <SPc1> were down 16 points, below fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures <DJc1> were down 119 points, and Nasdaq 100 <NDc1> futures were off 19 points.

Following an overnight drop in Asia, European stocks tumbled to three-month intraday lows on Thursday as investors fled riskier assets, triggering a rally in U.S. Treasuries.

Home builders D.R. Horton Inc <DHI.N> and Beazer Homes <BZH.N> both posted quarterly losses before the bell, a day after rivals Ryland Group Inc <RYL.N> and Pulte Homes Inc <PHM.N> also reported second-quarter losses.

Shares iof Beazer Homes dropped 2 percent to $16.70 in electronic trade, while D.R. Horton sahres fell 2.7 percent to $17.

Tool and household appliances maker Black & Decker Corp <BDK.N> also soured the tone with a dissapointing quarterly profit. It blamed a tough residential construction sector for its poor results. (Additional reporting by Kristina Cooke) ((Reporting by Ellis Mnyandu

Editing by Kenneth Barry

rm://[email protected]

Telephone: + 1 646-223-6085)) ((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com

* BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com)) Keywords: MARKETS STOCKS