Wall St Open Seen Flat To Higher; Earnings Weigh

Investors are looking for swift passage of the nearly $900 billion package, but it faces broad Republican resistance.

Wall Street was seen opening flat to slightly higher on Tuesday, as worries over weak earnings continued to erode confidence while investors hoped for swift action on a U.S. plan to bolster the economy.

Merck was a standout after it handily beat estimates and left its 2009 profit view unchanged at a time when companies are either cutting or not issuing forecasts due to uncertainty about the year ahead. Merck was up 4.1 percent at $29.60 before the opening bell.

Washington will be in focus with votes on amendments being offered on U.S. President Barack Obama's economic stimulus package expected to start.

Investors are looking for swift passage of the nearly $900 billion package, but it faces broad Republican resistance.

"What generally might move the markets today is a combination of what earnings look like and our assumptions as to how much of that has been priced in, but also ongoing rhetoric about the fiscal stimulus plan that's now being debated by the Senate," said Arthur Hogan, chief market analyst, Jefferies & Co in Boston.

"As we get closer to the eventuality of that passing, the market will find support."

But weak results from companies including Dow Chemical Co could weigh. The largest U.S. chemicals maker reported a loss as sales and volumes were hurt by the global economic slowdown, sending its shares down 4.5 percent at $10.55 in premarket trade.

The health of Dow's business often offers a picture on the industrial sector.

S&P 500 futures rose 2.20 points, above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures climbed 25 points, and Nasdaq 100 futures added 3.25 points.

On Monday, the Dow Jones and S&P 500 fell as uncertainty about the Obama administration's plan to stem bank losses hit financial shares and a bleak outlook by Macy's fueled worries the U.S. recession is worsening. But strong tech stocks helped the Nasdaq finish higher.

The Dow's declines put it at its lowest closing level so far in 2009.

Moves to shore up the economy were in focus around the world with Japan and Australia increasing efforts to bolster their economies. Australia cut interest rates to a record low, while the Bank of Japan said it would buy up to $11 billion of shares held by banks.

SanDisk Corp slumped more than 20 percent to $8.95 before the opening bell after the flash memory card maker warned that revenue for the current quarter would fall short of analysts' expectations.

Package delivery company United Parcel Service Inc was the latest company to say it would be cutting costs as the global downturn took a toll on package volumes. Shares put on 1.7 percent to $43.15 after initially falling.