"News of a quarterly loss from UBS, and a 60% drop in Q3 net income from Citigroup, may bring credit-market concerns back to the forefront," said analysts at Action Economics.
"We are getting more nervous with the markets as they once again get close to tagging their all-time highs without the benefit of many individual stocks participating," Paul Nolte, director of investments, Hinsdale Associates, wrote in an early note.
Futures for the Dow Jones Industrial Average were up 3 points at 13,997, while those for the S&P 500 advanced 1.60 points to 1,539.70. Nasdaq 100 futures declined 1.25 points to 2,112.75.
Dow component Citigroup said it anticipates a third-quarter profit drop of about 60%, blaming this on "dislocations in the mortgage-backed securities and credit markets, and deterioration in the consumer-credit environment."
In a similar vein, Swiss investment bank UBS AG saidd it would take a $3.4 billion hit against third-quarter profit tied to its subprime mortgage exposure. .
At 10 a.m. Eastern, the Institute for Supply Management releases its manufacturing index for September, with the consensus view of analysts looking for a reading of 52.6, down mildly from 52.9 in August.
Stocks also likely to be active include Walgreens , which said fiscal fourth-quarter net income fell to $396.5 million, or 40 cents a share, from $412.3 million, or 41 cents a share, with sales rising to $13.42 billion from $12.17 billion. Analysts had, on average, expected earnings of 47 cents a share on revenue of $13.54 billion.
On the deals front, wireless-phone maker Nokia Corp. said it has agreed to purchase digital map supplier Navteq Corp. for $78 a share, or $8.1 billion.
However, Acxiom Corp.'s deal to be taken private fell through. Suitors agreed to pay the data-management company a termination fee totaling $65 million.
In addition, shares of Chicago Mercantile Exchange Holdings Inc. may be on the move following their upgrade to outperform from market perform by Wachovia.
In early trading on the New York Mercantile Exchange, gold futures edged lower after rallying to a 27-year high during Friday's session and ending at $750 an ounce. Gold for December delivery fell 50 cents an ounce. .
Overseas, European markets started the fourth quarter cautiously, with the banking sector under pressure. .
Asian stocks closed mostly higher, although Japanese shares traded erratically. .
By Kate Gibson