Stock futures drop after IBM earnings

NEW YORK (Reuters) - Stock index futures were lower on Tuesday after technology bellwethers International Business Machines and Texas Instruments posted quarterly revenues that fell shy of expectations.

IBM (IBM.NY) fell 5 percent to $123.50 in premarket trade a day after it reported a decline in new technology services contracts in the second quarter as revenues rose 2 percent to $23.7 billion, but missed the average estimate of $24.2 billion.

Texas Instruments Inc also missed second-quarter revenue estimates, caused by weaker-than-expected orders from one mobile phone customer, identified by analysts as Nokia. Its shares were down 6.1 percent to $24.

The revenue results came on the heels of disappointing revenues from General Electric and two big banks last week. Investors have zeroed in on top-line numbers for signs of growth in the economy.

"Wall Street is being very critical as companies are falling short on revenue, but delivering on the bottom line," said Andre Bakhos, director of market analytics at Lek Securities in New York.

"So until earnings begin to show revenue growth, the market is going to be very apprehensive."

S&P 500 futures dropped 7.8 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 88 points, and Nasdaq 100 futures fell 16.75 points.

Goldman Sachs Group Inc , Johnson & Johnson , Yahoo Inc and Apple Inc are all expected to report results later Tuesday.

Bank of New York Mellon Corp said second-quarter earnings more than tripled as higher stock prices and tighter credit spreads boosted its asset management and custody business.

Whirlpool Corp beat quarterly profit and sales estimates on strong sales in Asia and Latin America, prompting the world's largest appliance maker to raise its outlook for the year. Shares rose 2 percent to $93.20 premarket.

Investors will also eye U.S. housing starts data at 8:30 a.m. EDT. Economists in a Reuters survey forecast a 580,000 annualized rate versus 593,000 in May, and a total of 570,000 permits in June compared with 574,000 in the prior month.

European shares extended declines Tuesday morning, with banks lower, after Hungary sold less debt than expected, and ahead of Goldman results.

Asian stocks rose Tuesday as shares of resource firms and banks clawed back recent losses.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)

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