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 * Gold prices steadied near seven-month highs, while yields on
Japan's 10-year government bond slipped into negative territory for
the first time ever on Tuesday.
* Global markets were lower, led by a fall in European bank stocks.
Chinese markets are closed through the week for the Lunar New Year.
* "There is a high probability of a further correction in equity
prices, led by banking and energy stocks," said Lorne Baring,
managing director of B Capital Wealth Management, adding that
looming defaults in the energy sector would hurt banks.
* Wall Street fell on Monday, after a late rally in energy stocks
failed to stem the selloff in the financial sector.
* "Investors should be concerned that the behavior was similar to
January's when macro trends dominated and late day short squeezes
prevented the type of liquidation selling necessary for a
sustainable low," said Michael O'Rourke, chief market strategist at
JonesTrading in Greenwich, Connecticut.
* U.S. stock indexes have failed to sustain several attempts at
rallies this year.
* Crude oil prices, which have been a strong influence on stocks
this year, were up on Tuesday. [O/R]
* Key to market sentiment will be U.S. Federal Reserve Chair Janet
Yellen's semi-annual testimony before Congress on Wednesday and
Thursday.
* Expectations are rife that the Fed, which raised interest rates in
December, will slow the pace of further hikes or suspend the program
to normalize rates until further signs of global economic stability.
* Meanwhile, investors will parse corporate earnings reports for
signs of impact from a stronger dollar and tepid global demand.
Profits at S&P 500 companies on average are seen to fall 4.1 percent
in the fourth quarter, according to Thomson Reuters I/B/E/S.
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* Dow component Coca-Cola was off 0.68 percent at $42.36 permarket
after reporting a fall in quarterly sales.
* Regeneron Pharma fell 4.5 percent to $373 after it forecast
slowing sales growth for its blockbuster eye drug.
* President Barack Obama is scheduled to present his final budget as
U.S. leader later in the day. Disney is slated to report results
after the bell.
Futures snapshot at 6:57 a.m. ET:
* Dow e-minis were down 68 points, or 0.43 percent, with 52,754
contracts changing hands.
* S&P 500 e-minis were down 8 points, or 0.43 percent, with 295,150
contracts traded.
* Nasdaq 100 e-minis were down 18 points, or 0.45 percent, on volume
of 51,313 contracts.
(Reporting by Aastha Agnihotri and Abhiram Nandakumar in Bengaluru;
Editing by Savio D'Souza)
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