Wall Street to open lower on earnings fears and banks

NEW YORK (Reuters) - Wall Street was poised for a lower open on Tuesday as investors fretted over grim earnings and the health of the banking sector, highlighting difficulties facing President-elect Barack Obama.

Optimism over a plan by Obama, who will be sworn in later on Tuesday, to push for a fresh stimulus package to stave off a worsening economy could help cushion the market.

But the banking sector could weigh heavily, taking a cue from global markets after Britain's Royal Bank of Scotland on Monday posted the biggest loss in U.K. corporate history, even as Britain launched a second bank rescue plan.

Banks have been at the epicenter of the credit crunch and resulting economic slowdown that has spread around the world. Among laggards before the bell were Citigroup , which was down 4.9 percent at $3.33, while Bank of America lost 10.9 percent to $6.40.

"As excited as we are about the change in (the U.S.) administration and the history that we're making in this country and what fiscal stimulus might look like, we're also, unfortunately, realistically taking a good hard look at the earnings power of corporate America," said Arthur Hogan, chief market analyst at Jefferies & Co in Boston.

"If last week was any early indication, it won't be a very attractive earnings reporting season."

S&P 500 futures fell 13.40 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 were down 93 points, and Nasdaq 100 futures lost 9.50 points.

Shares of State Street Corp dove 35.2 percent to $23.56 before the opening bell after the financial services company posted rising unrealized losses in its commercial paper program and investment portfolio, as well as lower fourth quarter profit.

Dow component Johnson & Johnson fell 2 percent to $56.30 after the company posted a rise in fourth-quarter profit even though its sales fell nearly 5 percent.

Energy companies could also come under pressure as the price of oil slid below $34 a barrel after a deal between Russia and Ukraine cleared the way for the resumption of gas supplies to Europe. Shares of Exxon Mobil were down 2.7 percent at $76 in premarket trading, while Chevron fell 1 percent to $71.02.

In the auto sector, Italy's Fiat took a 35 percent stake in Chrysler as part of a venture designed to secure the U.S. automaker's future. The fate of the ailing sector has weighed on Wall Street, as a failure of one or more of the Big Three Detroit carmakers would likely have repercussions throughout the economy.

Shares of Intel could weigh on the Nasdaq after a report that the world's largest chip maker has cut the price of some processors by as much as 48 percent. Intel was off 1.2 percent to $13.57.

(Editing by Chizu Nomiyama)

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