LONDON (MarketWatch) -- U.S. stock futures dropped Tuesday as investors continued to adjust to the swift deterioration in the economy, though a surprisingly early report of a growing profit at Hewlett-Packard carried indexes off early lows.
S&P 500 futures dropped 9.3 points to 841.70 and Nasdaq 100 futures dropped 10 points to 1,148.50. Dow industrial futures fell 60 points.
U.S. stocks ended with sharp losses on Monday, nearing lows of last month, as Alcoa stumbled on a brokerage downgrade and as Citigroup said it would cut over 50,000 jobs. The Dow Jones Industrial Average fell 233 points, the Nasdaq Composite lost 34 points and the S&P 500 fell 22 points.
The Treasury Department isn't likely to ask for Congress for authority any time soon to use the second half of the $700 Troubled Asset Relief Program, Treasury Secretary Henry Paulson said Monday in an interview with the Wall Street Journal.
Paulson, Federal Reserve Chairman Ben Bernanke and FDIC Chairman Sheila Bair are due to testify on the TARP before the House Financial Services Committee.
Equity strategists at HSBC said Paulson may have snatched defeat from the jaws of victory after his recent reversal on the TARP plan, which they noted put an end to one of the few positive trends, the declines in the three-month dollar LIBOR rates.
"We still think markets can rally in the year ahead, but also believe that we can add little value with a short-term call. We would again keep positions small and fairly defensive for the time being: reducing that defensiveness slightly two weeks back was premature," the strategists added.
There's also data on wholesale inflation for October, Treasury inflows for September and the National Association of Home Builders index for November.
Hewlett-Packard , in an unscheduled release, said fiscal fourth quarter adjusted earnings per share rose 20% on 19% sales growth and said adjusted earnings for the current fiscal year will range between $3.88 and $4.03 a share, which is higher than the average analyst estimate of $3.86 a share.
H-P shares rose 10.5%.
Yahoo shares climbed 14% in pre-open trade as CEO Jerry Yang stepped down. Yang, the co-founder of the Internet search firm, will stay on as CEO until a successor is named.
"We view Yang's resignation as a positive development because: (a) it indicates the board is frustrated with the performance of the company and management, and (b) it is a signal they are prepared to examine more deal options, in particular with Microsoft," said analysts at Bernstein Research.
Home Depot reported a less-than-forecast 31% profit fall for the third quarter, though it steered its annual sales guidance lower.
Pepsi Bottling announced job cuts and warned on profits.
A day after General Motors parted with its stake in Suzuki, Ford Motor Co. said it would cut its stake in Mazda Motor to over 13% from 33% for $540 million.
The dollar rose 0.2% to 96.38 yen and oil futures fell 7 cents to $54.88 a barrel.
The Nikkei 225 lost 2.3% in Tokyo and the FTSE 100 fell 1.1% in London.
