NEW YORK (CNNMoney.com) -- U.S. stock markets were pointing to a flat open Tuesday as higher oil and global tension were being balanced by better than expected earnings results from some blue chip companies.

After 8:40 a.m. ET, S&P and Nasdaq futures were mixed, although that was up from earlier in the morning before the flow of earnings reports.

This followed a key inflation report that said core producer prices rose as expected.

The Labor Department said the core producer price index, which strips out volatile food and energy prices, rose 0.2 percent last month, in line with estimates.

But the broader index rose 0.5 percent, higher that the 0.3 percent forecast by economists, according to Briefing.com.

The PPI report comes the day before the Consumer Price Index, which measures inflation on the retail level, as well as Congressional testimony from Federal Reserve Chairman Ben Bernanke. Markets have been particularly focused on inflation readings since the Fed has signaled it will base future rate hike decisions on such readings.

But the typical economic news is being overshadowed by the events in the Middle East, said Art Hogan, chief market analyst at Jefferies & Co.

"The PPI should be extremely important to us as should the CPI and the 100 S&P companies reporting earnings," he said before the report's release. "But I think it will be tough to get everyone to focus on that when the overtrading story is what is going on in the Middle East, and what it does to the price of a barrel of oil."

Hogan said that investors are widely assuming that the price of oil is heading up and will soon top $80 a barrel. He said whether or not the economy can weather such prices depends on the unknown of how long the price stays that high.

"We've proven we can ride out stubbornly high oil prices," he said. "If they hit $80 for two weeks, I don't think it has massive impact. If we are still trading at $80 in October, and we still have a Fed hiking rates, I think we've got a serious problem."

Oil prices rose, rebounding somewhat from Monday's huge selloff. U.S. light crude rallied 91 cents to $76.21 a barrel in electronic trading at 8:09 a.m. while Brent crude trading in London gained 88 cents to $76.80 a barrel.

Two Dow components - soft drink maker Coca-Cola (Charts) and diversified manufacturer United Technologies (Charts) - both reported a better than forecast gain in earnings early Tuesday. Merrill Lynch (Charts) also beat forecasts with improved results

Treasury prices fell, with the 10-year note yield rising to 5.09 percent from 5.06 percent late Monday.

Major markets in Asia fell on the Middle East tensions, while stocks in Europe were also lower in early trading. The dollar was lower against the yen and little changed against the euro in early trading.

In corporate news, Dow component Johnson & Johnson (Charts), wais also set to report results before the opening bell. After the close, IBM (Charts), another Dow component, and tech bellwether Yahoo! (Charts) are due to release quarterly figures.

Retailer Target (Charts) late Monday cut its forecast for growth in sales at stores open at least a year, a closely watched retail measure known as same-store sales. The company said its July growth should be between 3 to 4 percent, down from its earlier outlook of a 4 to 6 percent gain. Shares of Target lost 3 percent in after-hours trading.

Aircraft maker Boeing Co. (Charts) on Tuesday announced U.S. plane-leasing company Pegasus Aviation Finance Co. had ordered six of its 787-8 Dreamliner jets, a deal worth about $918 million overall based upon list prices. Shares of Dow component Boeing gained nearly 2 percent in Frankfurt trading early Tuesday.

General Motors (Charts) CEO Rick Wagoner told reporters in London the U.S. automaker would be glad to enter an alliance with Renault and Nissan if there is value for GM shareholders. Wagoner and Carlos Ghosn, the CEO of those two automakers, held initial talks on a possible tie-up on Friday and the companies are in a 90-day period to examine such an agreement.

Related: More information on markets ahead of the U.S. open.