* Apple, IBM slide after earnings
* China raises one-year interest rates by 25 basis points
* Futures down: Dow 76 pts; S&P 11 pts; Nasdaq 30 pts (Updates prices, adds economic data, earnings, byline)
By Rodrigo Campos
NEW YORK, Oct 19 (Reuters) - U.S. stocks were set for a sharp drop at the open on Tuesday as results from consumer and technology titans Apple and IBM disappointed investors and raised doubts about the strength of earnings in the third quarter.
A move by China to raise its benchmark one-year lending and deposit rate by 25 basis points, effective Wednesday, also weighed on sentiment. Any signal that China is trying to cool its economy, the engine of global growth, hampers equities.
"Any time China acts to stabilize or prevent inflation the world overreacts," said Robert Pavlik, chief market strategist at Banyan Partners LLC in New York.
"The miss on Apple's sales forecast and their conservative guidance" hurt futures, Pavlik said. "IBM's appeared to be a good quarter, but the stock sold off."
Apple Inc's shares, which hit a lifetime high on Monday but were at their most overbought levels since April, according to technical measures, fell more than 4 percent in premarket trade, ripping a hole through Nasdaq futures. The company reported its iPad shipments came in below expectations.
International Business Machines Corp said it won fewer technology services deals than expected in the third quarter, sending its shares 3.3 percent lower premarket, although it announced stronger profits and raised its full-year outlook..
"The Street is expecting a lot this quarter," said Pavlik. "I don't believe this is the end of the rally but an opportunity for those waiting to get into stocks."
S&P 500 futures dropped 11 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 fell 76 points and Nasdaq 100 futures lost 30 points.
Citigroup Inc dropped 1 percent after the U.S. Treasury Department said it launched a sale of 1.5 billion of its Citi shares under a prearranged trading plan.
Results from Bank of America Corp initially gave small support to futures, but shares of the largest U.S. bank by assets dipped 0.3 percent..
Coca-Cola Co reported a higher-than-expected quarterly profit and its shares edged up 0.4 percent..
Goldman Sachs Group Inc shares were little changed after the dominant U.S. investment bank said quarterly profit fell by more than a third, but it still beat Wall street estimates..
Ray Ozzie, the Microsoft Corp executive who took over the role of chief software architect from Bill Gates, is to step down, following a tenure in which the Windows-maker lost ground to Google and Apple.
Microsoft shares were down 2.4 percent premarket.
A number of Federal Reserve officials will be speaking on Tuesday, and the schedule includes remarks from Chairman Ben Bernanke at 4 p.m. (2000 GMT).
U.S. housing starts unexpectedly rose in September to a five-month high, but permits for future home construction fell, according to a government report.
U.S. stocks advanced on Monday as stronger-than-expected profit from Citigroup helped financial shares shake off worries that an investigation into foreclosures could threaten the stability of the housing market.