US STOCKS-Futures slide after bleak employment data

* U.S. unemployment highest in more than 26 years

* GE, Amazon shares rise after upgrades

* For up-to-the-minute market news, click [STXNEWS/US] (Updates with employment data, changes quote, adds byline)

NEW YORK, Nov 6 (Reuters) - U.S. stock index futures pointed to a nearly 1 percent drop at the open on Friday as U.S. unemployment reached a more than 26-year high and topped the psychologically important 10 percent level.

U.S. employers cut a deeper-than-expected 190,000 jobs in October, the government said, and the unemployment rate rose more than forecast to 10.2 percent, the highest since April 1983. For details, see [ID:nN06178752] and [ID:nN06177960]

"The headline number looks pretty good, relatively, but the 10.2 percent unemployment will be a shock for the market to digest," said Dan Cook, senior market analyst at IG Markets in Chicago.

Cook said 10 percent is mostly a psychological barrier, but "no recovery is possible until we get jobs back."

"I think it will lead to some selling pressure. However, the initial reaction will be a selloff, Then by the end of the day we'll see little change," he said.

S&P 500 futures fell 7.5 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 tumbled 71 points and Nasdaq 100 (NASDAQ: news) futures lost 10.50 points.

Shares of bailed-out insurer American International Group (NYSE: AIG - news) Inc dropped 10 percent to $35.40 in early trading after it said its main insurance business remained weak, even as it posted a second straight quarterly profit. [ID:nN06174086]

Shares of General Electric Co and online retailer Amazon.com Inc both rose premarket trading after Bernstein upgraded both the stocks.

(Additional reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)