US stock futures edged lower on Tuesday as a bleak outlook for corporate profits reinforced fears of a prolonged recession.

At 8:41 am ET, Standard & Poor's 500 Index futures expiring in March fell 2.80 points to 865.30. Dow Jones Industrial Average futures decreased 54 points to 8390. Nasdaq Composite Index futures dropped 3.25 points to 1202.75.

Late on Monday, Alcoa Inc. (NYSE: AA) reported a quarterly loss of $1.19 billion, or $1.49 a share, compared with net income of $632 million, or 75 cents a share in the corresponding quarter of 2007. It is for the first time in six years that the company has posted a loss. The company booked restructuring, impairment and special charges amounting to 88 cents a share in the quarter. The loss from continuing operations was $1.16 a share. Revenue decreased 18.5% to $5.7 billion from $7.0 billion in the year ago quarter.

Japanese electronics giant Sony Corp.(NYSE: SNE) may post Y100 billion or $1.1 billion as operating loss in the fiscal year ending March 31, a report published yesterday said. According to the leading Japanese business daily, the Nikkei, Sony Corp. is likely to suffer an annual loss for the first time in 14 years due to economic downturn, weaker demand, stronger yen, increased competition and restructuring charges.

Citigroup Inc. (NYSE: C) plunged over 14% in European trade on fears that the bank may post huge quarterly losses.

Early on Tuesday, printer maker Lexmark International Inc. (NYSE: LXK) warned fourth-quarter operating results will be weaker than previous guidance due to worsening economic downturn. The company now expects a 17% year-over-year drop in fourth-quarter revenue and expects to report earnings in the range of 19 to 24 cents a share.

In a speech at The London School Of Economics on Tuesday, Fed Chairman Ben Bernanke said "For almost a year and a half the global financial system has been under extraordinary stress -stress that has now decisively spilled over to the global economy more broadly." He added that" Fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system. More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets.”

A release by Census Bureau showed U.S. trade deficit declined 29% to $40.4 billion in November. Imports fell by a record 12% while exports fell 5.8% in the month, the report said.

The Ministry of Finance said that Japan's current account surplus contracted for the ninth straight month in November by 65.9%  from the year ago period as exports shrank 26.5%.

European stocks fell in afternoon trade. At 12:58 pm London time, the U.K. FTSE fell 80.44 points or 1.82% to 4,345.75. The German DAX and French CAC declined 2.10% and 2.26% respectively.

Asian stocks finished deep in red. The Nikkei 225 lost 422.89 points or 4.79% to close at 8,413.91. Hong Kong's Hang Seng Index dropped 302.95 points or 2.17% to 13,668.05.

NYMEX Crude Oil for February delivery dropped as much as $1.49, or 4%, to $36.10 a barrel.
 
Disclosure: Author does not own any of the stocks discussed here.