Stocks indexes futures edged lower on Wednesday as investors were cautious ahead of a speech by Federal Reserve Chairman Ben Bernanke and an auction of 10-year Treasury notes amid concerns about rising yields.
Bernanke is due to speak on "Economic Challenges: Past, Present and Future" at a Dallas luncheon, and investors will scour his testimony for clues about the Fed's thinking on interest rates and the economy, given recent better-than-expected economic data. For details, see
The Treasury will sell 10-year notes as the prospect of a stronger economy has pushed the yield on the note — a benchmark for mortgage rates — up toward 4 percent. Investors worry that if rates go too high, it may damage a housing market that is struggling to recover.
"It will be interesting to see if demand is strong (and), whether or not the 10-year (Treasury note) moves above the 4 percent rate. If rates were to go above 4 percent, that could intensify selling in the equity markets," said Peter Cardillo, chief market economist at Avalon Partners in New York.
S&P 500 futures fell 3 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 25 points, and Nasdaq 100 futures lost 3.5 points.
Shares of U.S. coal miner Peabody Energy Corp (BTU.N) will be in the spotlight since it may have to raise its bid for Macarthur Coal Ltd (MCC.AX) by about 10 percent after the Australian miner rejected its latest $3.27 billion offer.
European stocks fell 0.2 percent in early trade on Wednesday, led by heavyweight mining and banking shares, halting a two-session rally as renewed concerns over Greece's finances rattled investors.
Asian stocks neared 22-month highs Wednesday, with the Hang Seng index (.HSI) closing nearly 2 percent higher, as investors shrugged off festering worries about fiscal problems in Europe and focused on a recovery in the world economy.
The S&P 500 and Nasdaq rose modestly on Tuesday as the banking sector got a lift from positive analyst comments, while minutes from the Federal Reserve's last meeting eased concern over rising rates.
