U.S. stock futures were indicating a weaker start for Wall Street on Wednesday, with investors nervous ahead of the results of the Federal Reserve meeting and also watching potential mega-merger action between International Business Machines and Sun Microsystems.
S&P 500 futures fell 2.2 points to 775.30 and Nasdaq 100 futures fell 0.2 points to 1,190. Dow industrial futures fell 24 points.
Potential merger news is likely to grab market attention. The Wall Street Journal reported Wednesday that International Business Machines is in talks to buy Sun Microsystems (JAVA:
4.97, +0.27, +5.7%) in a deal that would expand its offerings on the Internet, in software and in finance. IBM is likely to pay at least $6.5 billion in cash or double Sun's closing price from Tuesday, the Journal reported, citing people familiar with the situation.
Shares of Sun soared 64% in pre-open trade, while IBM shares fell just over 2%.
The Federal Reserve will conclude its two-day meeting Wednesday amid signs the economy is still continuing to contract sharply. Over the past year, the Fed has slashed rates to zero and thrown $1 trillion at selected credit markets to try to break the economy's vicious downward cycle.
"Our economists do not expect any significant change in the statement from the previous meeting. The Fed is likely to emphasize that policy rates stay exceptionally low for some time and that several unconventional measures will continue to be used. The markets will however, look for any hints of a change in the Fed's appetite for Treasury bond purchases," said economists at UBS, in a research note.
A surprising jump in U.S. housing starts for February helped U.S. stocks to impressive gains on Tuesday -- led by banks, technology and consumer stocks -- and the fifth winning session out of six. The Dow Jones Industrial Average rose 178.73 points to 7,395.70, its highest close since Feb. 19.
Data for Wednesday includes consumer prices for February and current account data for the fourth quarter.
Europe stocks moved higher for a sixth time in seven sessions, while Asia saw modest gains.
The pan-European Dow Jones Stoxx 600 was up 0.2%, while the Nikkei 225 gained 0.7%, rising over the 8,000 level for the first time since February 10. The Bank of Japan held steady on interest rates, but said it would broaden its purchases of government bonds to bolster liquidity and ensure market stability.
Among other U.S. stocks in focus, Coca-Cola's $2.4 billion deal for China Huiyuan Juice Group was rejected by the Chinese government, scuttling the largest-ever foreign takeover of a Chinese company.
After the close of U.S. trading, Nike will report quarterly results.
Oil futures were down sharply, losing $1.14 to $48.60 a barrel, coming off a three-month high reached in U.S. trading on Tuesday as traders awaited inventory data.
The British pound dropped sharply vs. the U.S. dollar as the U.K. unemployment rate shot higher.
