Futures have a delayed reaction to the PPI data, eventually
falling to fresh session lows: (
S&P futures vs fair value: -9.0. Nasdaq futures vs fair value:
-8.2.).
Dow component Home Depot reported
that earnings plunged by two thirds in the quarter as it took a $543
million charge to close stores and scale back expansion plans. But the
drop in earnings excluding charges was not quite as large as analysts
had expected, as revenue at the nation's largest home improvement
retailer topped estimates despite the slump in home building and real
estate.
Other retailers due to report results before the bell Tuesday include
discounter Target, which is forecast to post
slightly lower earnings, and office supplies retailer Staples, which is expected to see earnings per share rise by a
penny.
In other deal news, investors will be keeping a close watch
on Microsoft and Yahoo again.
Microsoft said Sunday it had resumed talks with Yahoo about a deal.
According to the Wall Street Journal, Microsoft's proposal would
involve breaking up Yahoo, which would not be well received by Yahoo's
board.
Rating agency Standard & Poor's downgraded the rating for how
mortgage finance firm Fannie Mae would be without
any support from the government. The so-called "risk-to-the-government"
rating was cut to "A+" from "AA-."
Oil prices edged higher in early trading, as the commodity took another
run at a record trading high before retreating slightly. A barrel of
U.S. crude was up 19 cents to $127.24 in electronic trading.