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Futures Fall as Summer Slump Continues

U.S. stock index futures pointed to a sharply lower open Tuesday, continuing a late-summer slump for the major indexes, as investors took no encouragement from a pickup in merger activity.

The Dow Jones Industrial Average has now fallen for three straight sessions and eight of the past ten trading days, with the other major averages not faring much better.

European shares were lower across the board with energy and oil-related stocks sinking. Asian shares also slipped with the Nikkei 225 ending below 9,000 points.

On the economic front, the National Association of Realtors will issue its latest existing home sales figures at 10 am New York time. Economists are predicting July will show an annual sales rate of 4.6 million, which would be a 14.3 percent drop from June levels. That compares to a 5.1 percent drop from May to June.

Home builder stocks were likely to come under pressure as the market anticipates a weak report. Standard & Poor's on Monday downgraded the group's outlook from neutral to negative. The SPDR S&P Homebuilders ETF was off nearly 1 percent in light premarket trading.

There will be a small number of earnings reports including Medtronic, Big Lots and Burger King Holdings. Also in earnings news, WPP Groupraised its earnings outlook for the year after posting growth in earnings and revenue in the first seven months.

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In the technology sector, Dell may raise its $18-a-share bid for 3Par to match or exceed Hewlett-Packard's $24-a-share counter offer, according to reports.

Investors continued to bid up 3Par's price, sending shares up 3 percent in premarket trading.

Technology, along with financials and industrials, has been leading the market lower in its August slump. Tech shares on the Standard & Poor's 500 are off 4.5 percent, and some analysts have been watching Apple as the key to the sector's fortunes.

The computer giant's shares fell nearly 1 percent in premarket trading and have underperformed the sector over the past 30 days.

Analyst Dennis Gartman, in his daily Gartman Letter, noted Tuesday that "since mid-June Apple has not only failed to make new highs, it has made lower highs and now lower lows. Having closed at $246 last evening, more than 10% below its all time high, the chart looks ominous."

In other news, Genzyme and Sanofi-Aventis are continuing discussions about a Sanofi takeover of Genzyme, though they still haven't agreed on a price, according to the Wall Street Journal.

Staying with merger and acquisition news, a Canadian newspaper reported that Rio Tinto may bid for Potash along with a Chinese partner. Potash is talking with other potential suitors in a bid to get a better price than the nearly $39 billion being offered by BHP Billiton.

Pfizer shares slipped 1.2 percent premarket after the company said its lung cancer treatment Sutent failed to meet its goal for longer overall survival in a late-stage trial.

And Borders Group's chief financial officer Mark Bierley resigned to take another job, shortly after the book retailer named a new chief executive officer.

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