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Futures Slide on More Earnings Letdowns

U.S. stock index futures tumbled Tuesday as another batch of quarterly reports added to investor dismay over second-quarter earnings season.

Losses were pared somewhat after a report showed housing starts fell more than expectedbut building permits grew more than expected.

Johnson & Johnson along with Goldman Sachsboth issued reports that were less than expectations, sending futures lower to indicate a drop of nearly 1 percent at the open.

The earnings compounded disappointment over after-the-bell reports Monday from IBM and Texas Instrumentsfailed to meet investor expectations.

European shares were broadly lower, but mining firms made gains as metal prices rose on a weakening dollar. Asian indexes ended mixed, but mostly higher, with Chinese shares leading the gains.

Goldman shares fell more than 2 percent in the wake of better-than-expected results from Wall Street peers, Bank of America, JPMorgan and Citigroup. Goldman reported earnings of 78 cents a sharethat were hit by a settlement with the Securities and Exchange Commission as well as a British tax on bonuses.

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Dow component J&J reported a revenue gain of 7.5 percent but the company cut its full-year forecastdue to various product recalls.

Also on the earnings agenda are Biogen Idec, Bank of NY Mellon, Forest Labs, Harley-Davidson, Illinois Tool Works, Pepsico, State Street, UAL, UnitedHealth, and Whirlpool. Apple and Yahoo are set to report after the closing bell.

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On the economic front, the government is out with June housing starts at 8:30 am New York time, a number that's likely to get extra attention, especially after the unexpectedly large slump in the National Association of Home Builders' monthly sentiment index Monday. Investors continue to worry that the now-expired home buyer's tax credit merely moved demand forward rather than lifting the housing sector.

In corporate news Toyota said it has been subpoenaed by a New York grand jury for documents related to a problem with a steering mechanism in some of its vehicles.

Meanwhile, a day after Amazon.com announced that it's now selling more Kindle books than hardcover books, Japan's Sharp has announced that it will be the latest company to enter the e-reader and e-book market.

BP will be allowed to keep its damaged Gulf well capped for another day, after tests determined that nearby seepage was not related to the leak. Shares of BP were lower in London trading and closed lower in New York trading Monday.

And China is denying an International Energy Agency (IEA) report that it surpassed the U.S. last year to become the world's biggest energy user, saying the IEA had overestimated the country's energy consumption.

- Peter Schacknow, Senior Producer, CNBC Breaking News Desk, contributed to this report.