Futures Under Pressure by Libya Unrest

Stock index futures pointed to a lower open for Wall Street Tuesday as mounting violence in Libya prompted investors to cash in recent gains and take a more cautious stance after the President’s holiday on Monday.

Futures also slipped lower after the Case-Shiller Home Price Indexreported a 1.2 percent drop in its 10-city index, and a 2.4 percent drop in the 20-city index. The index is down for the sixth straight month.

At the same time, investors received a mixed batch of earnings news.

Home Depot gained after reporting better-than-expected profit and revenue, but Wal-Mart sank, after posting its seventh straight quarterly dropin U.S. sales. The discount retailer said sales fell 1.8 percent in the fourth quarter.

Macy's rose slightly after reporting higher profits on rising holiday sales. The department store chain expects sales and profits will continue to rise this year. But Barnes & Noble declined more than 5 percent after announcing it would suspend its dividend, and didn't provide a final quarter outlook for its fiscal year because of the bankruptcy filing of rival Borders.

Hewlett Packard will report earnings after the market closes.

In other corporate news, BHP Billiton plans to buy shale gas reservesfrom Chesapeake Energy for $4.75 billion.

Oil prices will take center stage as Libyan production falls amid violence in the country. Both London Brent and U.S. light sweet crude oil rallied to 2.5-year highs on Tuesday on concerns the revolt in Libyacould spread to other major oil producers in the Middle East and North Africa.

Saudi Arabia’s deputy oil minister tried to calm investors’ nerves before the US opening bell, telling CNBC the country will not allow any supply disruptions from the Middle East to impact global supplies of oil.

But the head of the International Energy Agency said higher oil prices posed a threat to the global economic recovery, warning that if oil prices stay at $100 per barrel or above this year it would be as much of a burden as high oil prices were for the world economy in 2008.

In U.S. economic news, the consumer confidence index is expected to increase from 65.6 in January to 67.0 in February, a Briefing.com poll showed.

European stocks fell in early trade on Tuesday, adding to the previous session's retreat, while Asian stocks closed lower as investors took profits.

On Tap Next Week:

TUESDAY: Consumer confidence, Richmond Fed Survey; Minneapolis Fed President Kocherlakota speaks, 2-year Treasury note auction; Chicago mayoral election.
WEDNESDAY: Mortgage applications, existing home sales, Philadelphia Fed President Plosser speaks, Kansas City Fed President Hoenig speaks, 5-year Treasury note auction; earnings before-the-bell from Lowe's and TJX; earnings after-the-bell from Limited Brands, Priceline.com, and Transocean.
THURSDAY: Durable goods orders, jobless claims, USDA agricultural trade outlook, new home sales, natural gas inventories, oil inventories, 7-year Treasury note auction, money supply; earnings before-the-bell from General Motors, Kohl's, Newmont Mining, Safeway, Sears and Target; earnings after-the-bell from AIG, First Solar, Gap and Salesforce.
FRIDAY: GDP (second reading), consumer sentiment; earnings before-the-bell from JCPenney.