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* Travel stocks hit by extended Lunar New Year holidays
* Banks follow U.S. Treasury yields lower
* Oil knocks energy shares down
* Futures down: Dow 1.53%, S&P 1.54%, Nasdaq 1.83% (Adds comment, updates prices)
By Sruthi Shankar
Jan 27 (Reuters) - U.S. stock indexes were set to open more than 1% lower on Monday on concerns about the financial fallout of a fast-spreading coronavirus outbreak in China as the country extended the Lunar New Year holidays and businesses shut down some operations.
Travel-related stocks, including airlines, casinos and hotels, were the worst-hit in premarket trading, with several cities in China in lockdown for contagion fears and new cases being reported from across the world.
Wynn Resorts Ltd, Melco Resorts & Entertainment Ltd and Las Vegas Sands Corp, which have large operations in China, were down between 6% and 8%. United Airlines Holdings Inc and American Airlines Group Inc fell 3.7% and 4.5%, respectively.
Shares of some tech heavyweights that enjoyed a strong rally recently were also down. Apple Inc, Alphabet Inc and Amazon.com Inc were all down about 2%.
Yum China Holdings Inc fell 7% after the company said it had temporarily closed some of its KFC and Pizza Hut stores in Wuhan.
The death toll from the outbreak in China rose to 81 on Monday. While a small number of cases linked to people who travelled from Wuhan have been confirmed in more than 10 countries, including Thailand, France, Japan and the United States, no deaths have been reported outside China.
Wall Street's fear gauge, the CBOE Volatility index jumped to its highest since Oct. 10.
"The coronavirus will not validate or invalidate the present market multiple, it will just elevate volatility due to the embedded uncertainty of things," David Bahnsen, chief investment officer of The Bahnsen Group, wrote in a client note.
"The Dow is up a stunning 3,000 points in just over three months – it hardly needs an excuse to see volatility elevated."
The benchmark S&P 500 recorded its worst week in six months on Friday as investors flocked to safer assets such as gold and government bonds.
That sent yields on U.S. Treasuries lower, putting pressure on shares of Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co.
At 9:00 a.m. ET, Dow e-minis dropped 443 points, or 1.53%. S&P 500 e-minis fell 50.75 points, or 1.54% and Nasdaq 100 e-minis slid 167.75 points, or 1.83%.
Shares in oil majors Exxon Mobil Corp and Chevron Corp fell about 1.5% each as crude price dropped below $60 per barrel as the outbreak stoked fears of slowing oil demand.
Fourth-quarter earnings season will kick into high gear this week with 141 of the S&P 500 companies expected to report this week including Apple, Microsoft Corp and Boeing Co .
No.1 U.S. homebuilder D.R. Horton Inc rose 0.5% after raising the upper end of its forecast for full-year home sales. (Reporting by Sruthi Shankar in Bengaluru Editing by Saumyadeb Chakrabarty)