Hoping for the best

NEW YORK (CNNMoney.com) -- An encouraging earnings report from a major retailer, a retreat in oil prices and bond yields could give an early lift to stocks Tuesday.

At 8:21 a.m. ET, Nasdaq and S&P futures were higher and pointing to a positive start for U.S. stocks, after pointing lower in earlier trading.

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Target (Charts, Fortune 500), the nation's No. 2 discount retailer, reported earnings that met Wall Street forecasts, and reaffirmed its earlier guidance. Shares of Target gained almost 2 percent in pre-market trading on the report.

"Target is helping," said Art Hogan, chief market analyst at Jefferies & Co. "Everyone is singing the consumer-is-dead song. This is at least a partial answer to that."

The Fed helped ease some panic in financial markets last week when it cut the rate at which it lends funds to member banks, known as the discount rate.

But nervous investors piled into safe Treasury bonds anew on Monday. Demand for short-dated Treasurys was so strong, the yield on the three-month T-bill fell by more than half a percentage point.

Tuesday Treasury prices rallied once again in early trading, taking the yield on the benchmark 10-year note to 4.61 percent from 4.63 percent late Monday, although that yield was up from the lows of the morning.

Oil prices fell in early trading, even as Pemex, Mexico's state-owned oil company, abandoned its offshore oil rigs the just ahead of Hurricane Dean, which was making landfall as on Yucatan coast Tuesday morning as a monster Category 5 storm. Still, the storm's track will apparently spare U.S. oil facilities in the Gulf and along the Gulf Coast, and the storm is expected to weaken before it reaches the Mexican facilities. The price of U.S. light crude lost 46 cents to $70.66 a barrel in electronic trading.

In global trade, major markets in Asia extended gains. European stocks opened higher but turned lower in morning trading. The dollar was slightly lower against the euro but once again sharply lower versus the yen.

U.S. stocks ended the session mixed Monday, as the relief sparked by the Federal Reserve's recent intervention waned and anxiety returned to the market.

In major corporate news, Capital One Financial Corp. (Charts, Fortune 500) said late Monday it was closing its GreenPoint Mortgage unit due to ongoing problems in the mortgage market. GreenPoint had been one of the leading Alt-A mortgage lenders, specializing in loans to people without full documentation of their income. Capital One purchased the unit less than a year ago as part of its acquisition of North Fork Bank. Capital One also cut its earnings per share outlook for the year to $5 from $7.15. Shares of the stock fell 0.3 percent in after-hours trading.

The Wall Street Journal's "Heard on the Street" column Tuesday said that some investors are speculating that Warren Buffet and his Berkshire Hathaway (Charts) investment holding company could be a buyer for parts of embattled mortgage lender Countrywide Financial (Charts, Fortune 500), although the story doesn't cite any source claiming to be familiar with such plans.

Another sign of problems in the housing and mortgage markets luxury home builder Toll Brothers (Charts, Fortune 500), the nation's No. 7 builder and one of the few to so far avoid posting a quarterly loss, being downgraded to a sell recommendation by Banc of America Securities.

There have been rising costs associated with people having to pay more for jumbo mortgages, which has hit the high end of the housing market in recent weeks. Toll Brothers shares fell nearly 9 percent in early morning trading in Frankfurt. The company, which released preliminary results earlier this month, is due to report final results for its third quarter on Wednesday.

The New York Times reports that Ford Motor (Charts, Fortune 500) may choose the new buyer for its British Jaguar and Land Rover brands by the time it reports its third-quarter results in October, a sale that could help the troubled automaker raise cash to finance its turnaround.