NEW YORK — U.S. stocks headed for a lower open Tuesday as investors grappled with increasing fears about the financial sector, including the prospect of bank failures.

Investors' jitters helped send the dollar to a new low against the euro.

Wall Street also is awaiting testimony from Federal Reserve Chairman Ben Bernanke, who is to appear before the Senate Banking Committee to offer his midyear report on the economy. Treasury Secretary Henry Paulson is set to appear as well. President Bush is also expected to release a statement at a news conference on steps to help stabilize the housing and financial markets.

Their comments will come only days after the Fed and the Treasury said they would lend financial support to mortgage giants Fannie Mae and Freddie Mac if necessary. The well-being of the government-chartered companies has drawn Wall Street's attention in recent weeks as the companies together hold or guarantee more than $5 trillion in mortgages — nearly half the nation's total.

Investors have grown increasingly nervous about banks after a run on IndyMac Bancorp Inc. led to the bank's takeover by the government Friday. IndyMac is the largest regulated thrift to fail. On Monday, shares of regional banks fell sharply on worries that other banks would succumb to bad debt.

Economic data on inflation and retail sales helped pull stock futures off their lowest levels but couldn't erase investors' anxiety about the financial sector.

Dow Jones industrial average futures fell 81, or 0.73 percent, to 10,954. Standard & Poor's 500 index futures declined 11.00, or 0.90 percent, to 1,217.30. Nasdaq 100 index futures fell 10.50, or 0.58 percent, to 1,792.00.

Bond prices jumped as investors sought the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.84 percent from 3.86 percent late Monday.

The weaker dollar raised the prospect of further increases in commodity prices.

Light, sweet crude rose 60 cents to $145.74 per barrel in premarket electronic trading on the New York Mercantile Exchange.

Concern about the health of the U.S. economy, the hard-hit financial sector in particular, sent the euro to a new high against the dollar.

Investors are worried about the impact of souring debt and the prospect of bank failures after the government's seizure of IndyMac Bancorp on Friday. Now concerns are flaring up about whether regional banks will be felled by sizable exposure to souring mortgage debt.

Investors looked to a fresh round of reports for any insights into where the economy might be headed.

The Labor Department reported that core inflation at the wholesale level, which excludes energy and food and is often the focus of investors, ticked up by just 0.2 percent. But overall wholesale prices jumped by a larger-than-expected 1.8 percent — the biggest gain since November. For the past 12 months, wholesale prices showed an increase of 9.2 percent, the largest increase since June 1981.

The Commerce Department reported that consumers are pulling back. Retail sales edged up by a modest 0.1 percent in June, below what analysts had been expecting.

The New York Fed said manufacturing activity in New York State has declined for a third straight month during July.

In corporate news, General Motors Corp. announced plans to lay off salaried workers, reduce truck production, suspend its dividend and borrow $2 billion to $3 billion as it adjusts to a declining U.S. market.

Johnson & Johnson said its second-quarter earnings rose 8 percent as sales increased for consumer health items and surgical and diabetes products. The health care company's earnings before a charge for an acquisition totaled $1.18 per share. Analysts, on average, expected the company would earn $1.12 a share before items.

Quarterly results are due after the closing bell from Intel Corp.

Overseas, Japan's Nikkei stock average fell 1.96 percent. In afternoon trading, Britain's FTSE 100 fell 2.60 percent, Germany's DAX index fell 2.21 percent, and France's CAC-40 fell 1.48 percent.