Futures Drop After Housing News, Earnings

Stock index futures fell further Tuesday despite a surprising rise in housing starts, but after news of a sharp decline in permits for future home construction.

U.S. housing starts rose 0.3 percentto a five-month high of 610,000 units, better than the 580,000-unit rate expected by analysts polled by Reuters, according to the Commerce Department. Permits for new construction fell 5.6 percent to a 539,000 unit pace, instead of the expected 580,000-unit pace, due to a decline in multi-family units.

Futures had been pointing to a lower open already as the dollar rose against a basket of currencies and after tech giants IBM and Apple reported results after the market closed Monday that disappointed investors.

IBM fell more than 3 percent in pre-market trading, despite beating expectations, with disappointment focused on its tech services business.

Apple dropped nearly 5 percent before-hours on worries about iPad sales.

Ahead of trading Tuesday, Bank of America reported earningsper share of 27 cents for the third quarter, excluding a goodwill charge. Shares are slightly lower in the pre-market. Analysts in a Thomson Reuters poll had forecast 16 cents a share. The group reported a loss of 26 cents a share for the same period last year.

Revenue came in at $26.98 billion, falling just short of analyst forecasts, and the group's net loss quadrupled year-on-year because of a previously announced $10.4 billion goodwill charge for its card business. Bank of America shares were down almost 1 percent just after the news, but reversed losses later in pre-market trade.

Goldman Sachs reported earnings and revenue resultsthat were better than expected thanks to net revenue gains from its investment banking business, although shares were also slightly lower in the pre-market. Earnings were $2.98 a share on net revenue of $8.9 billion.

Meanwhile, custody banks Bank of NY Mellon and State Street , released better-than-expected resultsfor the third quarter on earnings from managing client funds.

Citigroup's earnings lifted bank stocks on Monday after the bank reported third-quarter figures which beat analyst expectations.

But investors still worry that errors made in foreclosure processes could lead to significant costs for the banking industry.

Such concerns caused a sharp drop in financial stocks at the end of last week.

Dow components Coca Cola reported strong third-quarter earnings of 92 cents a share, against an expected 89 cents a share and Johnson & Johnson beat expectationswith a 2 percent gain in profit on lower sales of $14.98 billion.

Yahoo will release quarterly numbers after the close.

The dollar rose after The People's Bank of China said it wouldraise interest rates for the first time in three years. China plans to raise the benchmark one-year lending and deposit rate by 25 basis points.

European markets gained in morning trade on Tuesday, with financial stocks among the sharpest risers ahead of the earnings due to be released by their U.S. peers.

On the Calendar Next Week:

TUESDAY: Grant's Conference, CFTC Open Meeting on Dodd-Frank; Chicago Fed President Evans speaks; after-the-bell earnings from Yahoo, Sallie Mae and Western Digital.
WEDNESDAY: Mortgage applications, oil inventories, Beige book; Apple Mac Event, Richmond Fed. President Lacker speaks, Philadelphia Fed President Plosser speaks; before-the-bell earnings from Abbott Labs, Boeing, BlackRock, Morgan Stanley, United Technologies, Wells Fargo, M&T Bank, US Airways; after-the-bell earnings from eBay, E*Trade, Netflix and Seagate Technologies.
THURSDAY: ECB Meeting, jobless claims, leading indicators, natural gas inventories, money supply, Kansas City Fed President Hoenig speaks, CBO Director Elmendorf speaks; before-the-bell earnings from AT&T, Caterpillar, Credit Suisse, Eli Lilly, Novartis, Travelers, UPS, Continental Airlines, PNC Bank, Southwest Airlines, and Xerox; after-the-bell earnings from American Express and Amazon.
FRIDAY: G20 Finance Ministers & Central Bank Governor's Meeting; before-the-bell earnings from Verizon, Exelon, Ingersoll-Rand and Schlumberger.

More From CNBC.com: