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Futures Slide After NY Fed Report

Futures tumbled Tuesday as a sharp drop in New York manufacturing activity exacerbated worries about the deepening recession.

The New York Federal Reserve's Empire State manufacturing index fell to minus-34.65, a new low, from minus-22.2 in January. Economists had expected a much milder decline of minus-24. New orders fell to an all-time low.

This report from the New York Fed, along with a reading from the Philadelphia Fed later this week, is closely watched as a precursor to the national reading from the Institute for Supply Management, due out in two weeks.

Worries about more bank nationalizations also weighed on investors returning from the three-day weekend after markets were closed for Presidents' Day Monday.

But retail giant Wal-Mart beat earnings expectations, reporting fourth-quarter earnings excluding items of $1.03 a share, which topped the Reuters consensus estimate of 99 cents a share. The discount chain projects full-year earnings of $3.45 to $3.60 a share.

Stocks in Europe and Asia fell again, following a G7 weekend meeting accomplished little but the ousting of Japan's finance minister amid accusations he was drunk at a press conference and international criticism of the US stimulus plan.

In London, investors continued to fret about banks being taken over by the government, as Lloyds shares fell for the third straight session, pressured by losses at recently acquired HBOS.

Apart from retail in the US, the auto sector will be closely watched.

GM and Chrysler must detail new survival plans to the government Tuesday, with GM making progress in concession talkswith both the auto workers union and bondhodlers.

Elsewhere, another struggling industry, Atlantic City casinos, claimed a victim after Trump Entertainment Resorts filed for bankruptcy protection.

But Sirius XM may escape Chapter 11, with Liberty Media

close to buying a major stake in the company, Reuters reported.