TORONTO - Wall Street stock index futures pointed to a glum open as a dismal quarterly report from Wachovia Corp. added to gloom from a shaky outlook at Apple Computer.

In Canadian earnings news, Canadian Pacific Railway Ltd. (TSX:CP) reported a 40 per cent drop in second-quarter profit to $155 million as fuel costs swelled operating expenses while the slowing economy kept revenue flat at $1.22 billion.

That came after Canadian National Railway Co. (TSX:CNR) reported second-quarter earnings of $459 million, down from $516 million a year ago, as revenue rose four per cent to $2.1 billion.

CN said it expects to meet its full-year earnings target, but Canadian Pacific scaled back its profit outlook despite forecasting higher revenue.

Shares in Wachovia tumbled 11 per cent in pre-market trading after America's fourth-largest bank slashed its dividend while reporting a loss of US$8.9 billion. Amid deep writedowns on its troubled mortgage business, Wachovia fell far short of Wall Street expectations, adding to an anxious mood after disappointing results late Monday from American Express and Texas Instruments, as well as Apple.

AmEx second-quarter results fell 38 per cent due to the weakening economy, even though it concentrates on well-off borrowers with solid credit.

Meanwhile, Apple's third-quarter earnings rose 31 per cent and beat expectations, but but the company issued soft guidance for the current quarter.

Oil prices held steady on expectations Tropical Storm Dolly won't disrupt operations in the Gulf of Mexico. Light sweet crude was up 24 cents at US$131.28 on the New York Mercantile Exchange.

Alaskan legislators were set to vote Tuesday on whether to give Calgary-headquartered TransCanada Corp. (TSX:TRP) authority to pursue a natural gas pipeline from the North Slope.

Gov. Sarah Palin has proposed to award an exclusive licence to the Canadian company to pursue federal certification for a 2,760-kilometre pipeline.

The Canadian dollar opened at 99.87 cents US, up 0.01 cent from Monday.

European stock markets were mired in the red on weak earnings news, with the FTSE 100 index down 1.9 per cent early in the afternoon while the German DAX declined 1.3 per cent and the Paris CAC-40 receded one per cent.

Most Asian markets closed little changed Tuesday, as a gain in oil prices and mixed results from U.S. companies disheartened traders.

Japan's benchmark Nikkei 225 index jumped three per cent to 13,184.96, partly catching up with other Asian markets that rose sharply Monday while the Tokyo exchange was closed for a holiday.

Elsewhere, Hong Kong's -chip Hang Seng index was virtually flat while the Shanghai composite declined 0.5 per cent.

"Investors are waiting for the U.S. markets to go down,"commented Ernie Hon, an analyst with ICEA Securities in Hong Kong.

"Oil is also putting some pressure on the market."

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