9:00 AM Market futures traded down, hurt by Home Depot earnings.
U.S. stock futures pointed to a lower market opening Tuesday after the long holiday weekend. The pre-market sentiment was hurt by disappointing quarterly results from Dow component Home Depot which helped to offset news of possible merger of the nation's two big satellite radio stations Sirius Satellite Radio and XM Satellite Radio Holdings.

Home improvement giant Home Depot (HD: chart) reported a 28% drop in Q4 profit, hurt by a weak housing market and a charge taken to cover executive severance costs. Net profit fell to $925 million, or 46 cents a share, down from $1.29 billion, or 60 cents last year. Quarterly sales rose 4% to $20.27 billion, while comparable-store sales fell 6.6%. Shares of the Dow component slipped 2% in pre-market trading. On the other hand, Wal-Mart (WMT: chart) posted a Q4 net income increase of $3.94 billion, or 95 cents a share, compared with $3.59 billion, or 86 cents last year, beating estimates for earnings of 90 cents. Shares rose 2.7% in the premarket.

Two rival companies in the radio satellite industry were in the spotlight after Sirius Satellite Radio (SIRI: chart) agreed to combine with XM Satellite Radio (XMSR: chart) in a deal, billed as a merger of equals, that will value the combined company at around $13 billion. Shares in Sirius Satellite climbed 13% in pre-market trade, while shares in XM Satellite surged 27.5%. In other deal news, Vulcan Materials (VMC: chart) said it agreed to buy smaller construction aggregates company Florida Rock (FRK: chart) in a cash-and-stock deal worth $4.6 billion. Among stocks driven byanalyst comments, Jetblue Airways (JBLU: chart) dropped 3% in premarket trade after Morgan Stanley downgraded the stock. S&P 500 futures were last down 0.90 points at 1,457.90 and Nasdaq 100 futures fell 2.25 points at 1,825. Dow futures were down 2 points at 12,785.


8:30AM NY-7:30PM Mumbai Sensex declines Tuesday on profit-booking in large-caps.
The Sensex on BSE lost 149.52 points, or 1.04 %, to settle at 14,253.38 points. The market-breadth was weak with three stocks declining for every one stock advancing. As 1,892 stocks declined on BSE, 684 advanced and 54 remained unchanged. Of the 30 stocks in the Sensex, only five advanced, while the rest 25 declined. The turnover on BSE was Rs 3,885.54 crore, lower than Rs 4,204 crore on Monday. On NSE, the turnover was Rs 7,800.66 crore, compared with Rs 7,762.21 crore on Monday.

Economic and corporate news

Steel billionaire Lakshmi Mittal has entered the oil refining sector, buying a 49% stake valued at $728 million in a new Indian unit rejected by BP almost a year ago, Petroleum and Natural Gas Minister Murli Deora announced on Tuesday.

Traders in India are worried that the government is likely to hike short-term capital gains tax on sale of shares from the current 10% in the budget. The Government also announced that it does not intend to subsidize sugar exports and is considering building a buffer stock to help alleviate the pressure on mills from falling prices.

The Indian rupee declined against the dollar, traders showed lack of interest in buying the currency. Traders believe that the Reserve Bank of India is wants the rupee not to rise above 44 per dollar. In early trade, the partially convertible rupee was at 44.150/44.160 per dollar, dropping from February 19 close of 44.135/44.140.

Trading highlights

Indiabulls was the most-active stock on BSE with a turnover of Rs 241 crore followed by Global Broadcast and Reliance Industries.

Advancers

Ranbaxy was the leading advancer in the Sensex stocks, finishing with a gain of 1% at Rs 395.5. The other advancers included ITC, up 0.7% at Rs 175.8, Cipla 0.2% higher, at Rs 254.6, NTPC, rising 0.2%, at Rs 142.1 and Tata Steel, inching higher 0.1% at Rs 444.2.

Decliners

Oil exploration leader, ONGC, led the decliners, plunging 3.5% to Rs 875.6 on news that the Directorate General of Hydrocarbons had disallowed gas discovery to proceed in the Krishna-Godavari basin. ONGC may contest Directorate General of Hydrocarbons views. Cement stocks declined on concerns that the government could impose a ban on cement exports in the budget to control cement prices. Grasim shed 3% to Rs 2,570.9, and Gujarat Ambuja Cements lost 1.8% to Rs 130.1.

The State Bank of India plunged 2.2% to Rs 1,106.3. The State Bank of India on Tuesday joined other state-run banks in lifting the benchmark prime lending rate, which is linked to interest rates on working capital loans. Thus, borrowing cost of working capital loans for corporates is increased. ICICI Bank fell with SBI and dipped 0.7% to Rs 971, while HDFC Bank dropped 0.7% to Rs 1,025.35. Housing finance large-cap HDFC declined 2.3% to Rs 1,652.9, as investors were worried that rising interest rates may impact demand for housing loans.

Telecom stocks also dipped. Reliance Communications lost 2.3% to Rs 452.15, and Bharti Airtel shed 1.1% to Rs 788.10. Hindustan Lever lost 2.7% to Rs 199.65. Index heavy Reliance Industries shed 0.3% to Rs 1,412.85. Reportedly, Chevron Corporation may help Reliance in developing an exploration block in the fertile Krishna-Godavari basin. Auto stocks declined as well. Maruti Udyog shed 2% to Rs 895.20 and Bajaj Auto slipped 1.1% to Rs 2,991.


8:00 AM Sirius Satellite Radio and XM Satellite Radio Holdings agreed to merge.
Rivals in the satellite radio industry Sirius Satellite Radio Inc. (SIRI: chart) and XM Satellite Radio Holdings Inc. (XMSR: chart) announced an agreement to create a $13 billion combined company led by Sirius'' CEO. The $13-billion merger deal, including a debt of about $1.6 billion, is subject to regulatory and shareholders’ approval. Winning shareholder approval is seen as the easy part for the struggling satellite radio companies, whereas winning approval from the Federal Communications Commission and the U.S. Department of Justice''s antitrust division will be the challenging part. FCC Chairman Kevin Martin said that the companies have to prove that the deal would be in the public interest, with consumers having more choice and affordable prices.

On condition that the deal is approved by shareholders and regulators, shareholders of both companies will own 50% of the combined entity. However, Sirius will give $4.57 billion of its stock to XM shareholders, a substantial premium to the value of their shares. Investors in XM will get 4.6 shares of Sirius common stock for each XM share they own.The companies believe that the merger will boost the long-term financial success of satellite radio. Analyst estimates of the present value of cost synergies range from $3 billion to $7 billion. S&P 500 futures were last down 0.90 points at 1,457.90 and Nasdaq 100 futures fell 2.25 points at 1,825. Dow futures were down 2 points at 12,785.