Futures Trade Mixed Ahead of ISM Report

U.S. stock index futures hovered around the flatline Tuesday after a holiday weekend, as investors looked ahead to a key manufacturing report and an upcoming meeting of ECB policymakers.

Last week, all three major indexes logged their first gains in August since 2009, lifted by Federal Reserve Chairman Ben Bernanke’s Jackson Hole speech on Friday, in which he reiterated the central bank was ready to act if necessary.

Bernanke also said the Fed would continue to hold interest rates at near-zero, and indicated this was unlikely to change before 2014 at the earliest.

Meanwhile, ratings agency Moody's changed its outlookon the EU to "negative," warning it might downgrade the bloc if it decides to cut the zone's largest members: Germany, France and the Netherlands. The agency's move will add further pressure on the ECB when it releases details of a new debt-buying plan at its policy meeting later this week.

European shares traded lower following Moody's outlook and ahead of the ECB meeting.

On the economic front, the ISM's manufacturing index, which tracks monthly changes in the service sector is due at 10 am ET. Economists expect a reading of 50.0, versus 49.8 in July, according to a Reuters survey. A reading above 50 indicates an expansion in the sector.

And construction spending data for July will also be released at 10 am ET. Economists polled by Reuters forecast a rise of 0.4 percent, a repeat of the June increase.

Monthly auto sales will also be reported throughout the day.

Goldman Sachs and Morgan Stanley edged higher after CLSA upgraded both financial giants to "buy" from "outperform."

Among earnings, Campbell Soup rallied after the canned-soup maker posted a profit that topped estimates and boosted its outlook.

Smithfield Foods slipped after the pork producer missed earnings and revenue expectations.

Medicis Pharmaceuticals soared after news Valeant Pharmaceuticals will buy the biotech companyfor about $2.6 billion in cash.

By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up This Week:

TUESDAY: ISM mfg index, construction spending, Democratic National Convention, auto sales; Earnings from Teavana, PepBoys
WEDNESDAY: Weekly mortgage apps, productivity & costs, Microsoft/Nokia to unveil Windows 8 handset, Verizon/Motorola to unveil Droid RAZR; Earnings from Dollar General, H&R Block, Verifond
THURSDAY: Challenger job-cut report, ADP employment report, jobless claims, ISM non-mfg index, quarterly services survey, oil inventories, NY fashion week starts, Amazon.com press conference; Earnings from Hovnanian
FRIDAY: Gov't jobs report; Earnings from Kroger, Lululemon

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