European stocks were down 0.6 percent in morning trade, as investors fretted about lackluster corporate results and a credit rating downgrade of five Spanish regional governments.

Investors awaited earnings from a number of major U.S. companies such as DuPont (DD.N), 3M (MMM.N), United Technologies (UTX.N) and UPS (UPS.N).

Yahoo (YHOO.O) will be in the spotlight after the Internet company's quarterly earnings beat expectations and its chief executive officer said it is economically attractive to buy back the stock at current price levels.

Texas Instruments Inc's (TXN.O) quarterly revenue fell as demand for its chips slipped on economic concerns, and the company forecast more weakness this quarter in all its customer segments.

Western Digital Corp's (WDC.O) first-quarter profit topped lowered Wall Street expectations but the company said slowing PC sales and falling IT spending would hurt current-quarter sales and eat into margins.

Johnson Controls Inc (JCI.N), an auto parts supplier, said on Monday it will report a pre-tax charge between $225 million and $275 million in the fourth quarter as it cuts jobs and consolidates factories.

Apple Inc (AAPL.O) is expected to make its biggest product move on Tuesday since debuting the iPad two years ago, launching a smaller, cheaper tablet into a market staked out by Amazon.com Inc (AMZN.O) and Google Inc (GOOG.O).

A new lawsuit accused Wal-Mart Stores Inc (WMT.N) and two staffing agencies of requiring temporary employees to show up early for work, stay late, and work through lunch at the world's largest retailer.

The Dow industrials and the S&P 500 ended flat on Monday after a late-day bounce, as worries about slower global growth hitting corporate sales were offset by earnings that beat expectations.

The Dow Jones industrial average .DJI rose 2.38 points, or 0.02 percent, to close at 13,345.89. The Standard & Poor's 500 Index .SPX inched up just 0.63 of a point, or 0.04 percent, to 1,433.82. The Nasdaq Composite Index .IXIC rose 11.33 points, or 0.38 percent, to close at 3,016.96.

(Reporting by Blaise Robinson; Editing by Catherine Evans)

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