NEW YORK (MarketWatch) -- U.S. stock futures dropped sharply Tuesday as renewed worries over European national debts overrode another round of positive quarterly reports from companies including drug giants Pfizer Inc. and Merck & Co.
"The overseas markets are weighing on sentiment right now, and bond markets around the world are rallying. At least for the morning that is going to be the story," said Dan Greenhaus, chief economic strategist at Miller Tabak.
Futures for the Dow Jones Industrial Average fell 90 points to 11,012. Those for the S&P 500 were down 12.3 points at 1,186.30, while Nasdaq 100 futures declined 23.5 points to 2,003.5.
Greenhaus pointed to a proposal in Australia to tax miners, relatively poor manufacturing data out of China, and concern that Spain is preparing to ask the International Monetary Fund for financial aid as among the bearish factors.
"As that's a much larger economy that Greece, that is weighing as well," he said of the worries regarding Spain.
At least for the morning, Greenhaus said he expected the overseas concerns to override positive earnings from companies including MasterCard Inc. /quotes/comstock/13*!ma/quotes/nls/ma (MA 250.82, +0.08, +0.03%) , which reported a first-quarter profit rise of 24%.TODAY'S INTERNATIONAL MARKET STORIES
Global Dowâ¢ MarketWatch Topics: Greece â¢ Asia Markets | Europe Markets | LatAm Markets â¢ Canadian Markets | Israel Stocks | London â¢ U.S.: Market Snapshot | After Hours
The economics calendar features pending home sales for March, though economists note the report should be particularly strong due to the expiration of a tax credit. Factory orders data is also on tap.
Treasury Secretary Geithner will be testifying on bank reform efforts.
Overseas, Australian stocks dropped after the Reserve Bank of Australia made its third rate hike in a row and as a proposed tax continued to weigh on the resource sector. Tokyo was shut for a holiday.
Worries about sovereign debt weighed on European equities, with the Stoxx Europe 600 sliding 0.9% in late morning trade. Greece hired Lazard /quotes/comstock/13*!laz/quotes/nls/laz (LAZ 38.86, -0.79, -1.99%) for financial advice though the bank said a restructuring of debt "has never been an option to be considered."
The euro /quotes/comstock/21o!x:seurusd (CUR_EURUSD 1.3039, -0.0148, -1.1223%) was down 0.7% as well as the concerns over the Greek rescue package continue.
"The package as it now stands is certainly to be welcomed and may have assuaged market concerns had it been announced three to four months ago," said Michael Hart, a strategist at Citi. "But at this point, the situation has developed from a mere Greece-crisis into a full blown euro-zone sovereign crisis. And European policymakers continue to trail events in formulating their response."
A number of quarterly results were reported. Stock market laggards Pfizer /quotes/comstock/13*!pfe/quotes/nls/pfe (PFE 17.27, +0.36, +2.14%) and Merck /quotes/comstock/13*!mrk/quotes/nls/mrk (MRK 35.98, +0.71, +2.01%) both reported declining profits after making hefty mergers but also topped earnings estimates. Pfizer shares rose 1.8% in premarket trade while Merck edged 0.1% lower.
Interactive Data Corp. /quotes/comstock/13*!idc/quotes/nls/idc (IDC 33.23, +0.24, +0.73%) reached a deal to be purchased by private-equity groups Silver Lake Partners and Warburg Pincus for $3.4 billion. Majority owner Pearson /quotes/comstock/13i!pso/quotes/nls/pso (PSO 15.47, -0.84, -5.15%) will receive $2 billion before tax from the deal.
U.S. stocks climbed strongly on Monday, recapturing much of Friday's sharp slide, as a reporting showing rising consumer spending as well as improving car sales helped equities recapture much of Friday's nosedive. The Dow Jones Industrial Average rose 143 points, and the S&P 500 closes above the key 1,200 level in its best one-day showing since March 5.
Steve Goldstein is MarketWatch's London bureau chief. Kate Gibson is a reporter for MarketWatch, based in New York.