Futures Lower Amid European Bank Worries

Futures declined Tuesday amid growing concerns that the threat of a Greek default will lead to another banking crisis in Europe.

Among European banks, German financial giant Deutsche Bank said it expects third-quarter earnings to be substantially lower than expectedand Franco-Belgian Dexia plunged sharply amid worries the firm would need to be broken up.

Dexia's board held an emergency meeting in which it tasked CEO Pierre Mariani with preparing measures to resolve structural problems that were harming its operations.

Meanwhile both the Belgian and French governments pledged to take all measures necessary to protect Dexia’s account holders. According to Belgian newspaper reports, the bank could be carved up and its “good” assets sold.

The weakness in European banks put downward pressure on U.S. financials including Morgan Stanley , BofA and Citigroup . On Monday, Morgan Stanley closed at its lowest since Dec. 2008.

Greece remains in focus as well. Euro zone finance ministers met in Luxembourg on Monday evening and agreed that Greece could wait until mid-November to get the next instalment of emergency aid, Reuters reported.

And adding to woes, Goldman Sachs slashed its GDP outlook for advanced economies in 2012, saying it expects a growth of 1.3 percent compared to its previous view of 2.1 percent.

After a volatile trading day on Monday and a rough start to the fourth quarter, investors will start Tuesday amid more gloom in the U.S.

Besides fears over the banking system in the euro zone, analysts also debated the possibility of bankruptcyfor AMR , the parent of America Airlines.

Apple is expected to unveil the new iPhone during its 1pm ET event from Apple's headquarters. The iPhone 5 is rumored to be faster, thinner and larger-screened and would arrive just in time for the crucial holiday shopping season.

Meanwhile, EU regulators are expected to formally object to the proposed merger of Deutsche Boerseand NYSE Euronext this week, according to Reuters.

Investors will be listening closely to Federal Reserve Chairman Ben Bernanke when he testifies before the Joint Economic Committee at 10am ET.

August factory orders are out at 10am ET.

—Follow JeeYeon Park on Twitter: twitter.com/JeeYeonParkCNBC

Coming Up This Week:

TUESDAY: Factory orders, Bernanke speaks, Apple iPhone event; Earnings from Yum Brands
WEDNESDAY: Weekly mortgage apps, Challenger job-cut report, ADP employment report, IS non-mfg index, oil inventories; Earnings from Costco, Monsanto, Marriott
THURSDAY: BoE announcement, ECB announcement, jobless claims, chain-store sales; Earnings from Constellation Brands
FRIDAY: Non-farm payroll, wholesale trade, consumer credit, Sprint's 4G plans unveiled