Caution for a new Wall St. week

NEW YORK (CNNMoney.com) -- The shortened trading week is expected to get off to a bumpy start Tuesday as investors focus on earnings from retailers Home Depot and Wal-Mart.

At 7:42 a.m. ET, Nasdaq and S&P futures were lower.

Home Depot (Charts) said its earnings tumbled 28 percent in the latest quarter, hurt by the U.S. housing slump.

Wal-Mart (Charts), the world's biggest retailer, said net income climbed nearly 10 percent during its latest quarter. Sales, however, fell short of analysts' forecasts.

The results from the two companies, which are both Dow Jones industrial average components, could drag on the blue-chip index in the early going.

Stocks could also have trouble finding their footing coming back from last week's rally. The Dow scaled a fresh record high Friday.

U.S. stock markets were closed Monday in observance of Presidents' Day.

A string of deals were announced over the holiday weekend, with the biggest one between XM Satellite Radio (Charts) and Sirius Satellite Radio (Charts). The companies announced the deal Monday, confirming long-held speculation of a tie-up between the satellite radio rivals. (Full story.)

Construction materials firm Vulcan Materials (Charts) said Monday it agreed to buy Florida Rock Industries (Charts) in a cash and stock deal valued around $4.6 billion.

DaimlerChrysler (Charts) has been in focus because of speculation about a possible deal involving the Chrysler Group. Reports that the company was in talks with General Motors surfaced last week

Other stocks in focus include airline JetBlue (Charts), which canceled nearly a fourth of its flights over the weekend due to a Valentine's Day ice storm at its hub in New York. The carrier said it expects to be at full strength Tuesday. JetBlue was down 4 percent in electronic trading.

Oil prices sank. U.S. light crude oil for March delivery tumbled $1.20 to $58.19 a barrel in electronic trading.

Treasury prices fell, raising the yield on the benchmark U.S. 10-year note to 4.71 percent, up from 4.69 percent late Friday. Bond prices and yields move in opposite directions.

In global trade, Asian markets ended mixed and European shares were mostly lower in midday trading.

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