* With the partial government shutdown in its second week, and nine days until a decision must be reached to raise the nation’s debt ceiling, President Barack Obama on Monday said he would accept a short-term increase in the nation’s borrowing authority to avoid a default.
* In addition, a Senate aide said Republican Senator Rob Portman, an Ohioan influential on budget issues, was floating a plan to cut federal spending and reform the U.S. tax code as part of a broader deal to reopen shuttered government agencies and raise the government’s debt ceiling.
* The government shutdown has led to a dearth of economic data releases, leaving investors to focus on the fledgling earnings season. After the close on Tuesday earnings are expected from former Dow component Alcoa Inc and KFC parent company Yum! Brands Inc .
* The longer the government shutdown continues, the greater the damage on the economy could be, increasing the probability the Federal Reserve will leave its economic stimulus measures in place.
* S&P 500 futures fell 0.2 point and were slightly 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 were flat, and Nasdaq 100 futures added 1 point.
* PHH Corp is exploring splitting up its mortgage and auto fleet leasing businesses, and selling each of the units, three people familiar with the situation told Reuters on Monday.
* A U.S. court ruled in favor of Amazon.com Inc , which is locked in a dispute with International Business Machines over a $600 million cloud computing contract awarded by the Central Intelligence Agency, a court notice showed.
* U.S. fertilizer company Mosaic Co on Monday lowered its outlook for 2013 global potash shipments, citing weaker demand in India and a delay in settling a second-half contract between its export agency Canpotex Ltd and China’s Sinofert Holdings Ltd .
* European shares fell on Tuesday, with medical technology group Getinge slumping after a profit warning, as the United States’ budget stalemate weighed on stock markets.
* Asian shares rose as data showed China’s services industry continued to expand, soothing to some extent nerves jarred by fears of a U.S. debt default as the U.S. government shutdown entered a second week.
(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama)