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Futures Cut Losses; Euro Zone Worries Linger

U.S. stock market futures turned flat Tuesday as investors digested a handful of mixed earnings and worries over the euro zone against an improving manufacturing report from China.

European shares were lower after ratings agency Moody’s put Germany, the Netherlands and Luxembourg on negative watch, signaling that no euro zone economy is immune to the problems in countries such as Spain and Italy. Euro zone PMI figures also disappointed.

Spanish five-year government bond yields jumped above 10-year yields for the first time in over a decade as investors remained nervous that the country may need a full-scale sovereign bailout. The 10-year last traded above 7.5 percent.

Adding to woes, the euro zone's private sector shrank for the sixth month in July, fueling fears the region will slide back into recession.

Stocks ended lower in the previous sessionamid worries that Spain will need a full sovereign bailout and mounting fears that Greece may leave the euro. Stocks initially plunged, with the Dow dropping almost 240 points, but eventually clawed back throughout the trading day.

Meanwhile, an uptick in Chinese manufacturing helped offset some worries over Europe. HSBC said its China Manufacturing Purchasing Managers' Index in July rose to the highest level since February.

Among earnings, United Parcel Service slid after the package-delivery company reported quarterly results that fell short of Wall Street's expectations and cut its full-year forecast.

DuPont posted earnings and revenue that edged past expectations, but the Dow component said global economic uncertainty would push its 2012 profit to the low end of a previously announced forecast.

And AT&T posted earnings that topped expectations, but revenue was slightly lighter than expected.

Tech giant Apple , the most valuable company in the country, is scheduled to report after the closing bell. But some analysts expressed concernthat the results may not be as stellar as expected as consumers take longer to upgrade existing devices like the iPhone.

Cisco slipped even after the European Union regulatory approval for its $5 billion purchase of TV software developer NDS.

DeVry plunged after the for-profit education company warned that its fourth-quarter earnings and revenue will fall far short of expectations. The firm also plans to cut 570 jobs.

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

Coming Up This Week:

TUESDAY: FHFA home price index, Richmond Fed manufacturing index, 2-yr note auction; Earnings from Apple, Aflac, Broadcom
WEDNESDAY: Weekly mortgage apps, new home sales, oil inventories, 5-yr note auction, USDA food prices outlook; Earnings from Arcelor Mittal, Boeing, Bristol-Myers, Caterpillar, ConocoPhillips, Ford, GlaxoSmithKline, PepsiCo, Visa, Symantec, Western Digital, WholeFoods, Zynga
THURSDAY: Durable goods orders, jobless claims, pending home sales, 7-yr note auction, CFTC emergency meeting; Earnings from AstraZeneca, ExxonMobil, 3M, Credit Suisse, Dow Chemical, Pulte, Sprint, Amazon.com, Amgen, Facebook, Expedia, Starbucks
FRIDAY: GDP, consumer sentiment, summer Olympics start, 100 days to election; Earnings from Chevron, Merck, Barclays, DR Horton

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