Housing worries hit Wall Street

NEW YORK (CNNMoney.com) -- Stock futures turned lower Tuesday after retailer Home Depot cut its 2007 profit outlook, raising more worries about the housing sector.

At 7:30 a.m. ET, futures were lower, with a comparison to fair value pointing to a negative opening for U.S. stocks.

Home improvement retailer Home Depot (Charts, Fortune 500) lowered its earnings outlook for the fiscal year early Tuesday, citing weaker conditions in the housing market. Shares of the Dow component were 1.4 percent lower in early Frankfurt trading Tuesday.

Wall Street is waiting for a speech from Federal Reserve chief Ben Bernanke about inflation. Bernanke is due to speak to the National Bureau of Economic Research in Cambridge, Mass., starting at 1 p.m. ET.

In other corporate news, aluminum giant Alcoa (Charts, Fortune 500) posted a slip in quarterly profit that met forecasts after the market close Monday, while revenue rose less than Wall Street estimates in the first major report of second-quarter corporate results.

The company also extended its outstanding offer to acquire Canadian rival Alcan (Charts). And the Times of London reported Tuesday that BHP Billiton (Charts), the world's largest miner, is in talks with private equity groups about a joint $40 billion bid for Alcoa.

Shares of Dow component Alcoa initially slipped in after-hours trading on the results, then gained on the statement and reports about possible mergers. Alcoa was up 1 percent in Frankfurt trading.

Gains in Alcoa could give some support to the blue chip Dow and S&P 500 indexes, which just missed closing at record highs Monday. Still Art Hogan, chief market analyst at Jefferies & Co., said he doesn't expect to see stocks move higher, at least in morning trading.

"We sort of kicked off the earnings season with a wimper. Alcoa, and Home Depot aren't thrilling us here," said Hogan. "I'd be hard pressed to see anyone make a big move before we hear what Bernanke has got to say and how hawkish he's going to be on inflation."

In other merger news, shareholders of CBOT Holdings (Charts) spurned an unsolicited offer from InterContinental Exchange (Charts) to approve the company's purchase by Chicago Mercantile Exchange Holdings (Charts)

In overseas markets, European stocks edged higher at the open, and major Asian markets held near record highs. The dollar was lower against the euro and the yen.

Treasury prices were higher in early trading ahead of Bernanke's speech, taking the yield on the 10-year note to 5.12 percent from the 5.14 percent level reached late Monday.

Oil prices fell in early trading after Monday's rally, as U.S. light crude lost 25 cents to $71.94 a barrel in electronic trading.