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Stocks slipped at the market opening on Tuesday as investors digested a handful of mixed earnings reports, a day before Federal Chairman Ben Bernanke was due to give a clearer signal of the central bank's policy direction.
The Dow Jones Industrial Average was 12 points lower in early trading, and the S&P 500 and Nasdaq were also slightly in negative territory. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded below 14.
Global investors remain largely focused on Bernanke's annual testimony on Wednesday, from which they hope to garner further clues on the direction of monetary stimulus. Last week, the markets rallied after the Fed chief said the central bank would keep its stimulus policies in place for some time.
"In recent weeks the message that he's given is that we have seen signs of improvements in the U.S. economy and we're going to move towards tapering," said Robert Rennie, global head of currency strategy at Westpac.
"Then he gives us the message that we got last week, so I think markets will be cautious ahead of Bernanke's testimony," said Robert Rennie, global head of currency strategy at Westpac.
In earnings news, Dow component Coca-Cola matched analyst expectations of 63 cents a share in second-quarter profit, but missed on the revenue end with $12.75 billion against expectations of $12.95 billion.
Also, Goldman Sachs was the latest participant in the parade of big U.S. financial institutions to report blowout profits. The company reported earnings per share of $3.70, well ahead of the $2.82 estimates. Revenue also easily beat expectations, sending shares higher.
Johnson & Johnson edged higher after the drugmaker topped expectations, thanks to strong sales of prescription drugs and medical devices, and lifted its full-year earnings forecast.
On the economic front, the consumer price index gained 0.5 percent in June thanks to a gain in gasoline prices. Economists polled by Reuters had expected consumer inflation to increase 0.3 percent last month. Excluding food and energy costs, the core reading edged up 0.2 percent.
Industrial production edged up 0.3 percent in June after an unchanged reading in May, according to the Federal Reserve. Economists polled by Reuters had expected a gain of 0.2 percent.
The National Association of Home Builders was releasing the housing market index for June later. Economists polled by Reuters forecast a reading of 52.
In addition, Kansas City Fed President Esther George, who is a voting member of the Fed's policy committee, was scheduled to speak on the economy later in the afternoon.
Elsewhere, Japan's benchmark index hit a new seven-week high and as earnings season picked up.
The Nikkei 225 hit its highest levels since May 24, and the yen weakened to the 100 handle against the U.S. dollar, after Japan's economics minister, Akira Amari, said the government will go ahead with a planned sales tax hike.
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