U.S. stock futures were sharply lower on Tuesday, pointing to a drop at the market open, as the dollar tumbled and crude oil jumped toward $50 a barrel, prompting investors to take some cash off the table.
The stock market reopens after Monday's public holiday with retailers dominating the tail end of the U.S. earnings season, with Home Depot Inc., the world's largest home-improvement retailer, posting higher quarterly profit that matched Wall Street estimates.
Discount retailer Target Corp. said on Monday that it expects February sales at stores open at least one year to exceed its previous forecasts.
U.S. supermarket operator Winn-Dixie Stores filed for bankruptcy protection, citing increasing operational challenges since reporting a wider quarterly loss earlier this month.
S&P 500 futures fell 5.9 points, below fair value accounting for interest rates, dividends and time to expiration on the contract, indicating the S&P would open lower.
Dow Jones industrial index futures were down 53 points, while Nasdaq 100 futures fell 12.5 points.
"You have a tumble in the dollar and a rise in crude taking its toll. It's old fashioned and boring, but that's what's happening," said Gary Thomson, senior trader at IG Index.
Oil prices climbed more than a dollar to near $50 a barrel on Tuesday, bolstered by a late bout of cold winter weather in Europe and the United States and a sharp decline in the dollar versus other currencies.
U.S. crude oil (CLc1) jumped $1.22 cents to $49.57 a barrel, the highest level since Jan. 27. Rising oil prices raises concerns that higher energy costs will pinch corporate profits and curb consumer spending.
Meanwhile, the dollar fell one percent against the euro and yen on Tuesday as growing concerns that central banks were diversifying their reserves out of U.S. dollar assets pushed the greenback through key technical levels.
A weaker dollar raises concerns that foreign investors will pull out of U.S. assets.
The U.S. Consumer Confidence Index for February is due at 10 a.m., with a slight easing to 102.9 from 103.4 in the prior month being forecast by economists.
The New York Times said May Department Stores Co. has suspended its search for a new chief executive officer as merger talks with Federated Department Stores Inc. advanced.
According to the Times, the talks between Federated and May gained momentum over the weekend. The newspaper, citing one executive, said May has been holding out for a price "north of $40 a share."
The Dow Jones industrial average was down 2.44 points, or 0.02 percent, to end at 10,834.88. The Standard & Poor's 500 Index edged up just 0.22 of a point, or 0.02 percent, to finish at 1,210.34. The Nasdaq Composite Index was down 1.78 points, or 0.09 percent, to close at 2,087.43.
The S&P 500's slim gain to a fresh high for the year marked its longest winning streak since a rally that started in late October 2004.