Wall Street stock futures headed lower Tuesday after yesterday’s massive rally.

Investors will be watching financial stocks after The Wall Street Journal reported that 10 of the 19 U.S. banks undergoing government stress tests will need to raise capital, possibly including Wells Fargo, Bank of America, Citigroup and several regional banks.

The test results are expected to be released on Thursday.

Later this morning, investors also will look to the Institute for Supply Management’s April report on the services sector, due at 10:00 ET.

As well U.S. Federal Reserve Chairman Ben Bernanke will testify to Congress about the Fed’s efforts to get banks lending freely again and stimulate the economy.

Here at home, the Canadian dollar opened at US85.40¢, up 0.18 of a cent from Monday’s close.

In commodities news, light, sweet crude fell 3¢ to US$54.44 in electronic trading on the New York Mercantile Exchange.

In earnings news, grocery retailer Loblaw Cos. reported a higher first-quarter profit as it benefited from rising food price inflation and an extra week of sales.

Canada’s biggest grocery store chain earned $109 million, or 40¢ a share, for the quarter ended March 28, up from a profit $63 million, or 23¢ a share, for the same time last year.

Kraft Foods reported its first-quarter profit rose 10% on a hedging-related gain.

In Asia, Hong Kong’s Hang Seng edged up 0.3%, while markets in Japan were closed for a national holiday.

In Europe, markets in Frankfurt and Paris held near the flat line while the FTSE 100 surged 2.9% in London.

On Monday, the Toronto Stock Exchange surged sharply higher, gaining nearly 4% in a broad-based increase that pulled all 10 main groups on the index higher.

The S&P/TSX composite index rose 373.41 points, or 3.9%, to close at 9,870.37, the highest closing level for the benchmark index in six months.

The S&P/TSX Venture composite index gained 17.02 points, or 1.7%, to finish at 1,027.19.

In New York, U.S. stocks also soared higher, following the release of better-than-expected economic data.

The Dow Jones industrial average gained 214.33 points, or 2.6%, to end at 8,426.74.

The S&P 500 index gained 29.72 points, or 3.4%, to 907.24, a four-month high, putting the index into positive territory for the year to date.

The Nasdaq composite index gained 44.36 points, or 2.6%, to end at 1,763.56.

IE