The bears are out in full force on Wall Street Tuesday morning amid fears about corporate profits and lingering problems in the financial sector.
Financials led the US markets lower on Monday, following speculation that Freddie Mac and Fannie Mae will be forced to raise additional capital.
The Dow and Nasdaq will begin the day in bear market territory, more than 20 percent below their October highs. The S&P 500 Index is on the verge of falling into bear territory as well, and early indications were suggesting a rough start.
As of 6:15 am ET, The S&P Futures were down 9 points, the NASDAQ Futures were down 14 points, and the Dow Futures were down 68 points.
Asian stocks were hammered overnight, as the Hang Seng of Hong Kong plunged 692 points, while Tokyo's Nikkei lost 326 points -- its thirteenth decline in the past fourteen sessions.
In European intraday dealing, the FTSE of the UK was down 126 points, the CAC of France was down 101 points, and the DAX of Germany was down 145 points.
After the closing bell on Tuesday, Alcoa will kick off earnings season by reporting its second quarter results. Alcoa's earnings will be closely watched for clues about industrial demand in from emerging economies.With aluminum makers grappling with higher raw material and energy costs in the second quarter, Alcoa's earnings per share are expected to slip from 81 cents last quarter to 67 cents in the second quarter.
Office Depot (ODP) projected a higher-than-expected decline in its EBIT margin for the second quarter Tuesday morning, as it continues to be negatively impacted by challenging economic environment with ailing sales trends.
On the economic front, the markets may be affected by the National Association of Realtors' pending home sales index. Additionally, the Department of Commerce will release its data on wholesale trade.
A day after gloomy comments from San Francisco Fed President Janet Yellen rattled markets, the Fed will remain in focus as Chairman Ben Bernanke speaks at a forum on mortgage lending. Also, Richmond Fed President Jeffrey Lacker will talk about the U.S. economic outlook in Washington.
The price of oil edged lower in early electronic dealing Tuesday morning, slipping $0.63 to $140.74 a barrel. Crude briefly fell below $140 on Monday amid demand concerns and easing tensions between Iran and the West.
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