"One major negative that this market could endure is if we see oil heading towards $72 [a barrel]," said Peter Cardillo, chief market economist at Avalon Partners.
In recent action, crude oil was down 21 cents at $68.88, after earlier reaching $69.13 amid concerns about production from Nigeria and refining capacity in the U.S.
Futures for the Dow Jones Industrial Average were down 25 points at 13,700, while those for the S&P 500 fell 6.5 points to 1,961.
Nasdaq 100 futures lost 6.50 points to 1,961.
Among blue chips, home-improvement retailer Home Depot Inc. could rise after news that it agreed to sell its building supply unit for $10 billion.
Yet retailers will likely see some pressure, as Best Buy Co. Inc. fell 4% before the open. The company posted an 18% decline in quarterly profit, as the popularity of lower-margin notebook computers and gaming hardware ate into profits, and pruned its forecast for the year.
Homes and rates
Starts of new U.S. homes fell by 2.1% to a seasonally adjusted annual pace of 1.47 million in May, as building permits for new construction rose 3% to 1.50 million on a jump in multifamily dwellings, the Commerce Department estimated Tuesday.
The figures were slightly stronger than economists expected.
"The fact that building permits are up is a sign that there might be some consolidation in housing," Cardillo said.. "But yesterday, the [National Association of Home Builders'] housing index was at its lowest in 16 years."
The bond market, where prices have come under pressure and yields have spiked over the past couple of weeks, failed to react much to the latest housing news. The benchmark 10-year Treasury bond was recently up 3/32 to 95 6/32, yielding 5.127%.
Higher bond yields had pressured the stock market over the past couple of weeks, as they provide a risk-free alternative to stocks, while also raising borrowing costs for consumers and businesses.
"Higher yields have now been discounted by the market," said Avalon's Cardillo. "Some of the economic data that we're continuing to see has come better than expected, and the market is now seeking a consolidation level."
By Nick Godt