Futures Extend Gains After Housing Starts

Futures were higher Tuesday as investors were encouraged by a handful of upbeat corporate earnings results and after housing starts rose far more than expected.

Among banks, Wells Fargo posted a higher quarterly profit as the bank dipped into funds previously set aside for bad loans.

However, Goldman Sachs reported earnings that fell far short of Wall Street estimates, sending shares lower. And Bank of America posted a loss after an $8.5 billion settlement with mortgage bond investors. The banking giant closed below $10 a share on Monday, for the first time since June 2009.

IBM surged after the tech giant posted stronger-than-expected earnings after-the-bell Monday and raised its full-year guidance, helped by strong sales of its computers and software.

Coca-Cola earnings topped estimates, helped by strong growth in markets outside the U.S. And Johnson & Johnson also said earnings beat estimates.

Apple and Yahoo are due to report second quarter earnings after the markets close.

On the economic front, housing starts rose more than expected in June to touch a six-month highand permits for future construction saw a surprise increase, according to the Commerce Department.

Housing starts increased 14.6 percent to a seasonally adjusted annual rate of 629,000 units, the highest level since January. But May's starts were revised down to a 549,000 unit pace, which was previously reported as a 560,000 unit rate. Economists polled by Reuters had forecast housing starts rising to a 575,000-unit rate. Compared to June last year, residential construction was up 16.7 percent.

News Corp continues to be a stock to watch, with Rupert and James Murdoch set to speak before UK members of parliament and S&P putting the company's debt on "ratings watch negative."

Meanwhile, two weeks before their final deadline, President Obama and top lawmakers will face more pressure for a debt deal amid a growing sense that a last-ditch plan taking shape in Congress may be the only way to avoid a devastating U.S. default.

European shares pared some gains after German chancellor Angela Merkel said she did not expect one "spectacular result" at a meeting of euro zone leaders to discuss Greece's sovereign debt crisis.

Coming Up This Week:

TUESDAY: Fed's Hoenig speaks; Earnings from Apple and Yahoo
WEDNESDAY: Weekly mortgage apps, existing home sales, oil inventories; Earnings from Altria, United Tech, Abbott Labs, Blackrock, AmEx, Intel, Qualcomm and Ebay
THURSDAY: Weekly jobless claims, Philadelphia Fed survey, money supply; Earnings from AT&T, Morgan Stanley, Nokia, PepsiCo, Freeport McMoran, Travelers, Mircrosoft, AMD and SanDisk
FRIDAY: No major econ. news expected; Earnings from Caterpillar, GE, McDonald's, Schlumberger, Verizon, Honeywell

More on CNBC.com