Investors weigh global economic news

@CNNMoneyInvest May 22, 2012: 8:32 AM ET
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NEW YORK (CNNMoney) -- New overseas worries were offset by some better than expected earnings from U.S. retailers early Tuesday, putting U.S. markets on course for another uneven day of trading.

The Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures bounced on either side of breakeven Tuesday morning. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Markets were headed for a weak open after Fitch downgraded Japan, the world's No. 3 economy, and suggested further downgrades could be coming. But better than expected results from troubled retailer Best Buy (BBY, Fortune 500), as well as AutoZone (AZO, Fortune 500) and Williams Sonoma (WSM) among others, helped futures move back into positive territory later in the morning.

Meanwhile, a report showing lower inflation in the United Kingdom raised hopes that lower price pressures might allow leaders to move toward more stimulus to respond to economic weakness, despite the ongoing debate about the need to fix problems with sovereign debt.

European stocks moved higher in morning trading. Britain's FTSE 100 (UKX) rose 0.9%, while the DAX (DAX) in Germany gained 0.7%, while France's CAC 40 (CAC40) was up 0.6%.

European leaders are due to meet Wednesday in an adhoc summit to address the latest problems with European sovereign debt, worries that Greece is moving closer to leaving the eurozone, and the contagion effects an exit might have on other economies.

Early Tuesday the Organization for Economic Cooperation and Development cut its forecasts for the eurozone economy to a decline of 0.1% this year, and warned that sovereign debt problems pose a risk to the global economic recovery.

U.S. stocks bounced back from their worst week of the year Monday, on renewed optimism that European leaders would find a way out of the sovereign debt crisis.

World markets: Asian markets ended before the Japan downgrade was announced. The Shanghai Composite (SHCOMP) rose 1.0%, the Hang Seng (HSI) in Hong Kong gained 0.6% and Japan's Nikkei (N225) climbed 1.1%.

Economy: Analysts surveyed by Briefing.com expect existing home sales for the month of April to have increased to an annual rate of 4.65 million, up from 4.48 million in March. If forecasts are correct, it would mark the first increase in the pace of home sales since January.

The home sales reports comes ahead of Wednesday's readings on new home sales, home prices and mortgage applications. New home sales are also expected to post improvement.

Companies: Best Buy, which has been hit by a scandal that cost the CEO his job, along with store closings during the most recent quarter, reported solid earnings even as same-store sales fell 5.3%. The retailer also reaffirmed its earnings guideance of $3.50 to $3.80 a share, excluding restructuring charges. Analysts are only looking for earnings of $3.58 a share this year. Shares of Best Buy shot up 7% in premarket trading on the news.

AutoZone also reported better than expected earnings of $6.28 a share, but weaker than expected revenue sent its shares down 2.6% in premarket trading.

Williams Sonoma reported earnings per share of 34 cents excluding special items, which came in better than forecasts and year-earlier results. The retailer raised its earnings guidance for 2012. Shares were not trading in premarket.

Polo Ralph Lauren (RL, Fortune 500) is expected to report earnings of 84 cents a share on $1.6 billion in revenue, later Tuesday morning, while computer maker Dell (DELL, Fortune 500) is expected to post earnings of 46 cents a share on $14.9 billion in revenue.

Currencies and commodities: The dollar gained against the euro, the British pound and the Japanese yen.

Oil for July delivery fell 26 cents to $92.60 a barrel.

Gold futures for June delivery fell $7.80 to $1,580.90 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury slid slightly, but the yield remained near the 1.79% level reached late Monday.  To top of page

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