US stock index futures indicated a flat open Tuesday, following a mixed close for stocks Monday, as investors feared the government stimulus plan may not provide the catalyst they hoped for.
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Futures were off their morning lows and even turning slightly positive following positive earnings from pharmaceutical Merck , which posted a profit of 87 cents per share against a loss of 75 cents per share the previous year. The Dow component gained more than 6 percent in premarket trading and brought futures into mildly positive territory.
Citigroup also gained about 3.5 percent after a report that the troubled bank is expected to start lending $36.5 billion in mortgages and credit cards and in the purchase of troubled assets.
Pessimism came from doubts about the government's plan to jumpstart the economy and a fresh round of tough earnings news.
The near $900 billion stimulus package faced a "difficult next few days," according to President Obama, as the Democratic-controlled Senate debated the plan amid Republican opposition.
Obama is expected to name Senator Judd Gregg as his nominee for Commerce Secretary, according to a White House official.
Shares of BP were under pressure early, with the energy giant falling 3.4 percent after it reported a $3.3 billion loss during the previous quarter. BP said lower energy prices caused the drop, which was well off the $4.4 billion profit the company posted the previous year.
At the same time, traders digested another round of earnings reports, with Motorola posting a $1.57 per share loss and saying it was suspending its quarterly dividend. Shares quickly fell 2.6 percent.
Dow Chemical joined the chorus of dismal news, posting a $1.5 billion loss in the fourth quarter as sales dropped 23 percent to end one of the company's worst years. Shares tumbled 6.7 percent premarket.
While Schering-Plough swung to a profit of 27 cents a share in the fourth quarter, the drugmaker actually missed analyst expectations of 30 cents as it said slowing drug sales held revenue down. The company had lost $2.08 a share in the previous year.
The state of companies' balance sheets was causing concern on Wall Street. Department-store operator Macy's announced plans to cut 7,000 employees and slash its dividend Monday. Shares fell nearly 7 percent premarket.
Shares of SanDisk sank more than 22 percent premarket after the flash memory-card maker warned investors that its quarterly revenue would miss analysts’ expectations. SanDisk also said it may issue a stock offering.
Also, homebuilder DR Horton posted a narrowed loss of 20 cents per share that beat analyst expecations of a 52-cent per share loss.
On the economic front, chain store sales are due out at 7:45 am New York time and December’s pending home sales are out at 10 am.