Stocks: China lessens the gloom

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NEW YORK (CNNMoney) -- U.S. stocks were poised to open little changed Tuesday as a report showing an improvement in Chinese manufacturing offset ongoing worries about Europe.

Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were slightly lower ahead of the opening bell. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Early Tuesday, HSBC said its China Manufacturing Purchasing Managers' Index came in at 49.5 for July. While any reading below 50 indicates contraction, it is the highest number reported since February and shows significant improvement.

"Today's encouraging PMI data add to the feeling that recent policy stimulus is working," said Qinwei Wang, China economist at Capital Economics. "We expect China's economy to improve further in coming months, although avoiding a hard landing is not the same as beginning a strong rebound."

That helped offset some of the doom and gloom coming out of Europe.

Rating agency Moody's cut the outlook on Germany's prized Aaa credit rating to "negative" after the closing bell Monday, citing concerns about the stability of the eurozone and the potential for more bailouts.

Moody's also revised its outlooks on the Aaa ratings of the Netherlands and Luxembourg to "negative." Finland is the only country in the 17-nation eurozone to maintain its Aaa rating and a stable outlook.

Meanwhile, European manufacturing activity remains sluggish. Activity continued to contract across the eurozone in July, while Germany's PMI fell to a three-year low.

Spain remains in the spotlight, with the yield on the 10-year bond hitting a fresh euro-era record high of 7.625%. That came as Spain successfully auctioned €3 billion of 3-month and 6-month government bills, but investors demanded higher interest rates amid ongoing fears that Spain could require a full-blown bailout.

In the United States, investors will have a host of quarterly earnings to mull over, including results from DuPont, UPS and AT&T. Apple (AAPL, Fortune 500) and Netflix (NFLX) are on tap to report after the close.

U.S. stocks sank Monday as investors flocked to safe heavens such as Treasuries. The 10-year yield hit a record low of 1.395%.

World markets: European stocks were mixed in afternoon trading. Britain's FTSE 100 (UKX) and France's CAC 40 (CAC40) ticked down slightly while the DAX (DAX) in Germany edged up.

Asian markets ended mixed. The Shanghai Composite (SHCOMP) rose 0.2%, while Japan's Nikkei (N225) slid 0.2% and the Hang Seng (HSI) in Hong Kong shed 0.8% in a session shortened by a typhoon warning.

Economy: The Federal Housing Finance Agency will release its Housing Price Index for May at 10 a.m. ET.

Companies: DuPont (DD, Fortune 500) shares edged lower in premarket trading after the chemical maker's revenue fell short of expectations, and said it expects full-year earnings to be toward the lower end of its outlook.

AT&T (T, Fortune 500) shares rose after the mobile provider delivered higher earnings and revenue thanks to strong subscriber growth during the quarter.

DeVry's (DV) stock tumbled 29% after the for-profit education provider warned that it would earn far less than what analysts had been expecting in the fourth quarter, citing a shortfall in revenue, rising costs and a one-time charge. Rival Apollo Group (APOL), which operates the University of Phoenix, was also trading lower early Tuesday. JPMogran lowered its stock price target on the company to $43 from $47.

UPS (UPS, Fortune 500) shares fell after the shipping company reported earnings and sales that fell short of forecasts, and cut its outlook. The company blamed uncertainty in the United States, Europe's debt crisis and weak Asian exports.

Shares of Chinese web-search company Baidu (BIDU) jumped in premarket trading, after the company released quarterly earnings that beat expectations.

Currencies and commodities: The dollar rose against the euro and British pound, but lost ground versus the Japanese yen.

Oil for September delivery dipped 13 cents to $88.01 a barrel.

Gold futures for August delivery fell $3.30 to $1,574.10 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell slightly, but the yield remained steady around 1.44% from late Monday.