NEW YORK (Reuters) - Stock index futures slipped on Tuesday as investors fretted over the debate brewing in Washington over raising the U.S. borrowing limit as well as what is expected to be a lackluster earnings season.
Economic reports include U.S. retail sales and producer prices for December as well as manufacturing activity in New York state for January, all due at 8:30 a.m. Business inventories for November will be released at 10 a.m.
On Monday, President Barack Obama rejected any negotiations with Republicans over raising the U.S. debt ceiling. The United States could default on its debt if Congress does not increase the borrowing limit.
Resolving the debt ceiling debate is more a question of how than if. Investors are wary of another last-minute agreement like the one in August 2011, said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.
"Of course people expect the government will not default on its debt ... but there could be damage done in how it's resolved," said Meckler. "A long, dragged out fight over this damages the credibility of the government and can weaken the global market for U.S. debt."
Speaking separately on Monday, Federal Reserve Chairman Ben Bernanke urged lawmakers to raise the debt ceiling. The central bank chairman also gave a cautiously optimistic outlook for U.S. growth but no clear hints on when the Fed would curb its aggressive bond purchases.
Corporate earnings season picks up the pace this week and investors are bracing for disappointment. Analyst estimates for the quarter have fallen sharply since October. S&P 500 earnings growth is now seen up just 1.9 percent from a year ago, Thomson Reuters data showed.
S&P 500 futures fell 6.5 points and were below 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 were down 31 points, and Nasdaq 100 futures lost 9.25 points.
Shares of Dell
(Editing by Kenneth Barry)
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