Apple earnings & more to watch Tuesday

Earnings should dominate Tuesday's trading session, from 3M and Caterpillar before the bell to Apple after the close.

"From my perspective, this is the heart of earnings season. How earnings trends are developing is top of my mind," said David Lefkowitz, senior equity strategist at UBS Wealth Management Americas.

"The market wants to see the good earnings data is not just about financials," he said.

Apple, the largest S&P 500 stock by market capitalization, is the highlight of Tuesday's earnings reports. Analysts polled by Reuters on average expect the iPhone maker to report earnings of $1.65 a share on revenue of $46.89 billion for the quarter.

"Tech is the largest sector in terms of an earnings weight," Lefkowitz said. "Getting a better handle on trends there is going to be important. We've seen some weakness in industrials. [We] want to see how broad-based that is."

The Nasdaq 100 closed Monday at a record high of 4,909.97 after hitting an all-time intraday high of 4,911.59, helped by gains in Microsoft, Amazon.com, Apple and Alphabet, Google's parent company.

Tech led the S&P 500 higher, which closed up 10 points at 2,151. The broad index gains were helped by more than $100 billion in corporate deals, including AT&T's more than $85 billion acquisition of Time Warner, announced heading into Monday's trading session.

The major banks set a positive tone to earnings season with better-than-expected third-quarter results, helped by a surge in revenue from bond trading. The majority of S&P 500 names have yet to report, with about one-third of the index posting results this week.

"I hope what the market's signaling or finding out [is the] earnings recession doesn't exist or never really existed," said Bill Stone, chief investment strategist at PNC Asset Management.

Quarterly earnings per share have declined for four straight quarters as a sharp plunge in oil prices along with a strong dollar weighed heavily on corporate profits. If all remaining companies report earnings that match estimates, earnings per share will return to growth this quarter, up 1.1 percent from the third quarter last year, according to Monday's Thomson Reuters data.

Other earnings reports due ahead of Tuesday's open include DuPont, Eli Lilly, Fiat Chrysler, General Motors, Merck, Novartis, Procter & Gamble, United Technologies, Corning, Freeport-McMoRan, KeyCorp, KKR, Lockheed Martin, Pentair, Sherwin-Williams, Sprint, TD Ameritrade, Under Armour, Valero Energy, Whirlpool, AK Steel, II-VI, Janus, JetBlue, Spirit Airlines and TransUnion.

Firms set to post quarterly results after the close include Chipotle Mexican Grill, Capital One, Discover Financial, Edwards Lifesciences, Express Scripts, Juniper Networks, Vertex Pharma, iRobot, Pandora Media, Panera Bread and Owens-Illinois.

Among the few pieces of minor economic data scheduled for release Tuesday are August home price indexes from S&P Case-Shiller and the Federal Housing Finance Agency.

Consumer confidence for October is scheduled for release later in the morning from The Conference Board. Analysts expect the index to tick down to 101.5 from 104.1 in September, according to a consensus estimate from Reuters. The Richmond Fed survey is also due Tuesday morning.

Atlanta Fed President Dennis Lockhart is scheduled to speak at 1:20 p.m. ET on lending and investing in community development. Fed speakers will then be in a quiet period ahead of the central bank's meeting next week.

The Treasury is set to hold a two-year note auction in the afternoon.

Treasury yields rose Monday, with the two-year yield near 0.84 percent in late trade and the 10-year yield around 1.76 percent following an encouraging pickup in the October flash U.S. Markit manufacturing PMI.

The U.S. dollar index was little changed in late trade Monday after hitting intraday 97.188, its highest since February 3. The euro was around $1.088.

"For now, everything depends on the election," said Athanasios Vamvakidis, head of G-10 FX strategy in Europe at Bank of America Merrill Lynch.

If Hillary Clinton wins the U.S. presidential election and federal government gridlock continues with a Republican-dominated Congress, Vamvakidis said the last leg of the dollar rally will come around December, when the Fed likely raises rates and the European Central Bank probably extends its asset purchase program. The euro dollar is near his year-end target of $1.08.

Overseas on Tuesday, ECB President Mario Draghi is set to speak in Berlin on "Stability, Equity and Monetary Policy."