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 Embattled bank Citigroup Inc. announced a hefty $18.1 billion write-down for bad mortgage assets early Tuesday and slashed its dividend. The news of Citigroup's drastic efforts to shore up its balance sheet had been widely expected.
Citigroup, which lost $9.83 billion in the fourth quarter, also announced a massive $12.5 billion capital injection. That news helped send the bank's stock up 44 cents, or 1.51 percent, to $29.50 in pre-opening trade.
Hope that struggling financial firms will bolster their finances also was stirred by news that Merrill Lynch & Co. Inc. agreed that three foreign investment funds will invest $6.6 billion in the Wall Street firm.
The futures contract for the Dow Jones industrial average was down 74 points at 12,724, Standard & Poor's 500 futures were off 10.10 points at 1,410.20 and the Nasdaq 100 contract down 13.0 points at 1,942.0.
Treasurys moved higher in early trade, as crude oil futures came under a touch of pressure.
Since the start of the year, an indecisive stock market has vacillated between rallies and selloffs, as market players try to discern whether the economy has begun to shrink or is just slightly slowed by troubles in the credit and housing markets.
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 On Tuesday, new retail sales, producer price and regional manufacturing reports should offer some clues. According to Thomson/IFR economists, the Commerce Department's retail sales report should show a decline of 0.4 percent for December, meaning that even the holiday shopping season did not inspire worried consumers to spend money.
The research firm also expects a relatively small 0.2 percent gain in the Labor Department's producer price index for last month, which would be down sharply from 3.2 percent in November.
The New York Federal Reserve will also issue its Empire State Manufacturing Index.
More clues on the state of the economy and corporate America should come this week as fourth-quarter earnings season gets into full swing. Results from technology bellwether Intel Corp. will be studied carefully when the company reports after the close of U.S. markets.
On Monday IBM Corp. delivered a pleasant surprise by revealing that the favorable impact of the weak dollar in its overseas operations helped it post earnings well above expectations. Investors are hoping that currency impact also will bolster the reports of other multinational companies.
In overseas trade, Japan's Nikkei Stock Index closed down 0.98 percent. In Europe, London's FTSE 100 was down 1.12 percent, Frankfurt's DAX lost 0.66 percent and Paris' CAC gave up 0.79 percent.
[Associated Press; By LESLIE WINES]
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