Stock futures lower after rally

Wall Street headed for a lower open Tuesday, a day after a big rally, as investors monitored gradually easing credit market conditions while sifting through another batch of quarterly earnings reports for clues on where the economy is headed.

Some pullback in stocks was to be expected as investors cash in profits from Monday's big gains. Still, market anxiety appears to have lessened considerably compared to the previous two weeks when fears about tightening world credit and the health of the economy battered stocks across the globe.

However, analysts warn the renewed optimism could quickly dissipate if credit conditions worsen again. They say the back-and-forth trading of recent days is likely to continue as investors seek to determine whether stocks have bottomed out and try to gauge the severity of a recession that many believe is already here.

Investors are studying the first of hundreds of third-quarter earnings reports expected this week for signs of how the economy will weather the downturn. Among the companies reporting Tuesday are Caterpillar Inc., Apple Inc., DuPont Co. and Pfizer Inc.

On Monday, the Dow rose more than 400 points on more signs of a reviving credit market and support from Federal Reserve Chairman Ben Bernanke for further steps to aid the economy, including an additional stimulus package.

Ahead of the market's open, Dow Jones industrial average futures fell 99, or 1.06 percent, to 9,218.

The Standard & Poor's 500 index futures fell 7.40, or 0.75 percent, to 983.00, and the Nasdaq 100 index futures fell 19.50, or 1.43 percent, to 1,340.50.

Strains in the credit markets eased further in response to a sweeping series of bailout measures by world governments, including a joint U.S. and European plan to buy stakes in private banks to boost to their lending. Demand for Treasury bills, regarded as the safest assets around, lessened further Tuesday in a sign that credit markets are gradually returning to a healthy state.

The three-month Treasury bill Monday yielded 1.28 percent, up from 1.12 percent late Monday. The yield fell to 0.20 percent last Wednesday, meaning investors were willing to take the slimmest of returns in exchange for a safe place to keep their money.

The dollar was higher against other major currencies, while gold prices fell.

Light, sweet crude fell 48 cents to $73.77 a barrel in premarket electronic trading on the New York Mercantile Exchange. On Monday, oil rose moderately after OPEC's president said members were planning a substantial production cut in an effort to halt falling prices.

Overseas, Japan's Nikkei stock average was up 3.34 percent. Britain's FTSE 100 was down 0.02 percent, Germany's DAX index was up 0.92 percent, and France's CAC-40 was up 2.04 percent.

(Copyright 2008 by The Associated Press. All Rights Reserved.)