US STOCKS-Wall St set for further losses on recession worry

* Investors seek safety, gold hits record high

* U.S. crude futures drop 3 percent

* Technicals in focus, 1,100 eyed on the S&P 500

* Futures off: Dow 162 pts, S&P 16 pts, Nasdaq 22.5 pts

* For up-to-the-minute market news see [STXNEWS/US] (Updates prices, adds comment, byline)

By Rodrigo Campos

NEW YORK, Aug 19 (Reuters) - The S&P 500 stock index on Friday was likely to extend its 4.5 percent decline of the previous session as concerns mount the U.S. economy may slip back into recession.

An absence of economic data and corporate earnings news will shift attention to technical analysis, with last week's S&P low near 1,100 in focus.

U.S. futures followed declines in Asian and European markets, the latter falling near 2-year lows on concern over the health of the banking system.

"This fear that there's going to be some widespread problem with banks is pressuring stock prices," said Robert Pavlik, chief market strategist at Banyan Partners LLC in Palm Beach Gardens, Florida.

"Technical levels are what market participants are focused on now," he said. "The next level of support (on the S&P) is around 1,120, which we will probably go through, then down to 1,100."

S&P 500 futures fell 16 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures lost 162 points and Nasdaq 100 futures dropped 22.5 points.

The worsening economic outlook helped lift spot gold to a record high of $1,877 an ounce as investors reached for safety.

Shares in the energy sector could be among the worst hit as U.S. crude futures dropped more than 3 percent to $79.85 per barrel.

Bank of America is cutting 3,500 jobs this quarter according to an internal memo, as the biggest U.S. bank grapples with its $1 trillion problem-loan portfolio and growing economic concerns. Shares fell 2.3 percent to $6.85 in premarket trading. [ID:nL4E7JJ0EK]

Hewlett-Packard Co slid 13.9 percent to $25.40 a day after it said it may spin off its PC business, the biggest in the world, and cut its outlook. [ID:nL4E7JJ22Q] (Reporting by Rodrigo Campos; Editing by Kenneth Barry)