Stock index futures dropped on Tuesday on a subpar start to earnings season following Alcoa Inc's worse-than-expected results and Chevron Corp's warning that its income would be sharply lower.

Alcoa recorded a narrower quarterly loss late Monday, but Wall Street's forecast was for a small per-share profit, and the aluminum company's stock fell 7.3 percent to $16.18 before the bell.

Alcoa is the first Dow index component to report, and the miss disappointed investors.

That disappointment was compounded when fellow Dow member Chevron warned Monday its fourth-quarter results would be sharply lower than the previous quarter because of further deterioration in oil refining margins. The shares fell 1.6 percent to $79.55 in premarket trading.

Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland said that while Alcoa was a disappointment, investors would look ahead to reports from Intel Corp and JPMorgan Chase & Co later in the week.

It seems that Alcoa always disappoints, but at the same time it will be interesting to see how the week plays out, he said.

S&P 500 futures fell 9.1 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures dropped 69 points, and Nasdaq 100 futures lost 12.50 points.

Electronic Arts Inc slashed its fiscal 2010 forecast late Monday on weak holiday sales in Europe and a shift in the way it distributes its video games. The stock fell 8.6 percent to $16.70 in premarket trading.

KB Home , one of the top five U.S. homebuilders, posted a quarterly profit of $1.31 per share on Tuesday, helped by a tax benefit, but revenue fell 27 percent to $674.6 million. KB's shares fell 3.2 percent to $15.85.

Supervalu Inc reported a quarterly profit and lower costs versus a year-earlier loss that included heavy charges, and the supermarket chain backed its earnings outlook for the full year. The shares rose 8.3 percent to $14.00.

In another bright spot, Tiffany & Co saw holiday sales rise, prompting the jeweler to forecast full-year earnings above market estimates.

(Editing by Padraic Cassidy.)

Chevron