NEW YORK (CBS.MW) -- Look for stocks to drip in more red ink Tuesday as sellers stay in charge amid nagging accounting worries and little incentive to buy equities as the fourth-quarter earnings season winds down.
March S&P 500 futures declined 6.50 points, or 0.6 percent, and were trading 6.00 points below fair value, according to HL Camp & Co. And Nasdaq futures gave up 14.00 points, or 1.0 percent and were trading about 13.10 points under fair value.
Investors will keep close watch on Big Blue's performance.
IBM (NYSE: IBM - news) took a 4.6-percent beating on Friday amid a New York Times story taking issue with the hardware giant's accounting of the sale of a business unit to JDS Uniphase.
IBM said in an interview with the Wall Street Journal that it would begin releasing more details in its financial statements on items that had typically been lumped together. Big Blue, for example, said it would now supply figures on such items as pension-fund gains and sales of real estate and intellectual property in its annual report and quarterly SEC filings. But IBM defended its current practices, telling the Journal that they had been compliant with accounting guidelines.
"Since earnings season is winding down there's not much potential for positive news to help the market out near-term. The fear that investors have about inaccurate accounting is quashing any potential for a sustainable market rally," said Louis Navellier, portfolio manager of the Navellier Performance Funds.
The fund manager expects the top averages to be stuck in the mud until accounting woes lift.
"What it will take to extinguish these accounting fears is for a flagship company -- like IBM -- to go through an investigation process and come out clean. Until the public sees some evidence that these fears are inflated beyond reality, companies will have a tough time benefiting from any possible positive news. We expect the market to remain in a trading range for the next several weeks," Navellier continued.
Treasurys get more mileage
Government bonds extended gains, with long-dated maturities enticing the greatest amount of buyers.
The 10-year Treasury note pout on 6/32 to yield 4.84 percent while the 30-year government bond climbed 1/8 to yield 5.36 percent.
The day's share of economic news includes the release of January housing starts, which are seen coming in at a 1.60 million rate, according to economists polled by CBS.MarketWatch.com.
Other indicators that will grab attention this week include the January consumer price index and January leading economic indicators, set for release on Wednesday and Thursday, respectively.
In the currency sector, the dollar sprinted 0.9 percent to 133.81 yen while the euro gave up 0.2 percent to 86.87 cents.
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