Stocks were expected to open lower as large retailers including Home Depot (HD) and Target (TGT) reported weak results, and Washington prepared a $300 billion rescue package for struggling homeowners.
Also, inflation worries were raised by the April U.S. producer price index report. The price index rose 0.2% last month, but the core rate of inflation -- excluding food and energy -- jumped 0.4%, which Action Economics called "disconcerting."
Home Depot posted earnings of 41 cents per share, vs. 53 cents a year ago. Same-store sales dropped 6.5% and total sales fell 3.4%. Housing and home improvement markets remained difficult and worsened in many parts of the country, the firm said.
Target reported earnings of 74 cents per share, vs. 75 cents a year ago, as same-store sales fell 0.7%. Total sales were 5% higher. To raise capital without going to the debt markets, Target will sell 47% of its credit card receivables to JP Morgan Chase JPM for $3.6 billion.
Under a deal reached in the U.S. Senate, the government would insure up to $300 billion in refinanced loans for Americans having trouble meeting mortgage payments.
On Monday, the Dow Jones industrial average gained 41.36 points, or 0.32%, to 13,028.16. The broader S&P 500 index added 1.28 points, or 0.09%, to 1,426.63. The tech-heavy Nasdaq composite index lost 12.76 points, or 0.5%, to 2,516.09.
On the New York Stock Exchange, 16 stocks lost ground for every 15 in positive territory. On the Nasdaq, the ratio was 17 to 12 negative.
Oil prices were again moving higher Tuesday. On the NYMEX, crude oil for June delivery rose 45 cents to $127.50 per barrel.
Among other stocks in the news, Staples (SPLS) posted earnings of 30 cents, vs. 29 cents a year ago, as North American same-store sales dropped 6%. Total sales were up 6.4%. The retailer expects the weak economic climate to continue throughout the year.
Saks (SKS) reported lower-than-expected earnings of 13 cents per share, vs. 7 cents a year ago. Same-store sales rose 8.4%, while total sales were up 8.8%.
Medtronic (MDT) posted earnings of 78 cents for the last quarter, vs. 66 cents a year ago, as sales rose 18%.
Major European indexes fell Tuesday. In London, the FTSE 100 index lost 1.86% to 6,257.70. Paris' CAC 40 index fell 1.61% to 5,059.32, and Germany's DAX index moved 1.3% lower to 7,132.11.
In Asia, Japan's Nikkei 225 fell 0.77% to 14,160.09, while Hong Kong's Hang Seng index lost 2.23% to 25,169.46.
Treasury market
Treasury prices were barely moving Tuesday morning. Two-year Treasury notes were flat at 99-15/32 for a yield of 2.415%; the 10-year note fell 01/32 to 100-11/32 for a yield of 3.839%; and the 30-year was flat at 96-25/32 for a yield of 4.578%.