U.S. stock futures edged higher Tuesday as a larger-than-expected cut to Australian interest rates lifted financial markets in Asia and Europe in the wake of the previous day’s steep losses.

Asian markets were mixed on Tuesday after Australia’s central bank announced its largest interest rate cut in 16 years.

The Reserve Bank of Australia cut its key rate by one full percentage point to 6%. Analysts had expected only a half-point cut.

Most markets across Asia rallied on the speculation that other central banks would follow suit to combat the global credit crisis. The main indexes in South Korea, Singapore and Taiwan all moved higher after a global sell-off on Monday.

But the Japanese Nikkei 225 index lost 317.90 points, or 3.03%, to close at 10,155.90 on Tuesday, its lowest finish since December 2003.

Hong Kong’s Hang Seng index was closed on Tuesday for a public holiday.

European bourses were positive, with the FTSE 100 up 1.2% early in the afternoon in London. The German DAX rose 0.5% and the Paris CAC-40 advanced 1.8%.

But the news wasn’t all positive in Europe. Iceland took over its second largest bank and propped up its battered currency.

Here at home, the Canadian dollar kept dropping, opening at US90.55¢, down 0.43 cent from Monday and down about 3.5¢ since the start of October.

In other economic news, both Federal Reserve Chairman Ben Bernanke and European Central Bank President Jean-Claude Trichet have speeches scheduled later Tuesday, and the Fed is due to release minutes from the last interest-rate setting meeting.

In commodities news, light sweet crude for November delivery was up US$2.96 at US$90.77 a barrel on the New York Mercantile Exchange in electronic trading, after plunging to an eight-month low on Monday.

Gold rose US$15.10 to US$881.30 an ounce.

In today’s earnings news, Bank of America Corp. reported its third-quarter profit fell 68% to a much weaker than expected US$1.18 billion, and it will raise $10 billion by issuing common stock. It also slashed its dividend.

Aluminum giant Alcoa Corp. reports after the closing bell.

On Monday, the energy-heavy Toronto Stock Exchange plunged after oil prices closed at their lowest level in eight months and investors continued to show nervousness about the U.S. bailout plan that passed last week.

The S&P/TSX composite index dropped 572.92 points, or 5.3%, to close at 10,230.43 on Monday. Earlier in the day, the index had lost as much as 11%, touching 9,617.93.

The junior S&P/TSX Venture composite index shed 166.13 points, or 12.78%, to close at 1,134.10.

Investor nervousness was equally prevalent south of the the border, pushing the Dow Jones industrial average below 10,000 for the first time since 2004. The Dow closed down 369.88 points, or 3.6%, to close at 9,955.50.

The tech-heavy Nasdaq composite index lost 84.43 points, or 4.34%, to close at 1,862.96, and the S&P 500 shed 42.34 points, or 3.85%, to finish at 1,056.89.