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Futures Narrowly Mixed; Coca-Cola Slides

U.S. stock index futures were narrowly mixed Tuesday ahead of President Obama's State of the Union address this evening.

President Barack Obama will give his annual address on Tuesday at 9 pm ET, and will outline policy goals for his second term. He is expected to focus on the "sequester" of automatic spending cuts that will kick in after March 1 if Congress takes no action to stop them.

"Markets are likely to focus more closely upon any hints of how the sequester, now just two weeks away, can be avoided," wrote Rebecca O'Keeffe, head of investment at Interactive Investor, in a note on Tuesday morning.

"I think we're going to see more of a line drawn in the sand on sequestration," said David Gilmore of FX Analytics. "It will be interesting to see where Obama is on reducing the deficit. I think what we've learned about the fiscal cliff is stuff happens at the last minute. Can kicks should be expected. There's no reason for suicide watch when it comes to fiscal policy."

However, O'Keeffe disagreed, saying there was a high prospect of the automatic cuts taking place.

"With some Democrats happy at the prospect of sweeping defense cuts, and many Republicans happy at the prospect of sharp spending cuts, the chance of the automatic cuts taking effect is clearly high," she said.

(Read More: State of the Union May Well Set Tone for Budget Talks)

Among earnings, Coca-Cola slipped after the beverage giant posted revenue that was slightly below expectations, hurt by weakness in Europe.

Michael Kors soared after the specialty retailer blew past earnings expectations and topped revenue estimates, as same-store sales surged and the company added new stores.

Fossil climbed after the fashion accessories retailer edged past earnings and revenue forecasts, thanks to strong revenue growth in North America and Asia.

Avon Products jumped after the beauty and personal products company posted better-than-expected earnings.

On the economic front, small business sentiment edged up in January to 88.9 last month, according to the optimism index from the National Federation of Independent Business, as owners anticipated better business conditions in the next six months, despite higher taxes and looming government spending cuts.

Meanwhile, the Treasury Department's monthly budget for January will be issued at 2 p.m. on Tuesday. Economists polled by Briefing.com forecast a $2 billion deficit, against a December deficit of $27.4 billion.

Also on Tuesday, the Treasury is scheduled to auction $32 billion in three-year notes.

By the end of this week, the Treasury will have auctioned a total of $72 billion in 3-year, 10-year and 30-year notes.

Early on Tuesday, Barclays posted numbers for 2012 pretax profit which was sharply down on 2011, revealing the full cost of charges for mis-selling financial products.

The bank also announced it will cut at least 3,700 jobs in 2013, as part of an overhaul aimed at reducing annual costs by 1.7 billion pounds ($2.7 billion) by 2015.

"By cutting back the investment banking division, it appears Barclays is willing to kill the golden goose which has produced a significant chunk of its profits in the past," said City University Professor of Organizational Behavior Andre Spicer on Tuesday.

"This move is a gamble. It will inevitably lead to lower rates of profit in the future."

—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up This Week:

TUESDAY: Fed's George speaks, 3-yr note auction, Treasury budget, Fed's Plosser speaks, State of the Union; Earnings from Buffalo Wild Wings, Clearwire
WEDNESDAY: Weekly mortgage applications, retail sales, import & export prices, business inventories, oil inventories, Fed's Bullard speaks, 10-yr note auction; Earnings from Comcast, Deere, Dean Foods, Cisco, Applied Materials, MetLife
THURSDAY: Jobless claims, natural gas inventories, Fed's Bullard speaks, 30-yr bond auction, Fed balance sheet/money supply, 13-F filings; Earnings from General Motors, PepsiCo, Rio Tinto, CBS
FRIDAY: Empire state mfg survey, Treasury int'l capital, industrial production, Fed's Pianalto speaks, consumer sentiment, e-commerce retail sales, credit card default rates reported; Earnings from Campbell

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