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.