Futures Slightly Higher; Banks in Focus
Stock index futures pointed to a slightly higher open for Wall Street ahead of yet another batch of earnings, but concerns over the global economic recovery persisted after China unexpectedly raised interest rates.
The increase, which reflects concerns about rising inflation, came as a surprise as several top leaders recently expressed confidence that inflation is under control.
Morgan Stanley's shares fell in pre-market trading after after posting earnings that were worse than expected, even as its quarterly revenue results beat forecasts. Profits at the investment bank were hurt by tigher debt-related credit spreads.
Wells Fargo , meanwhile, beat analysts expectationswith reported record net income in the third quarter of $3.34 billion, thanks to its merger with Wachovia and the growth of its core business.
The stock market rally this fall benefited Blackrock, which posted a surprising rise in profits. The investment managers received more assets from clients. Blackrock earned $2.75 a share, far better than thte $2.46 anticipated by analysts, according to Thomson Reuters I/B/E/S.
A rise in commercial airline volume helped to improve Boeing's results for the quarter, and the airline maker also lifted its guidance. And United Technologies also beat analysts expectations, as earnings rose 13 percent.
U.S. mortgage applications fell last weekas interest rates on 15- and 30-year fixed-rate mortgages rose for the first time in six weeks, the Mortgage Bankers Association reported on Wednesday.Data on crude inventories, will be released at 10:30 am. Investors will also be looking out for the Fed's Beige Book survey at 2.00 pm New York time.
Banks are in focus again, after a group of eight investors accused Bank of America of inappropriately bundling some mortgages into more than $47 billion of bonds. The bank said it would fight being held responsible for the investors' losses.
The White House also warned it would hold lenders accountable for any illegal foreclosure practices, sending the shares of major banks lower on Tuesday.
Investor Jim Rogers, who started the Quantum Fund with George Soros, said on CNBC that he does not think bank stocks are attractive now because there is still uncertainty about their balance sheets.
Yahoo shares were higher despite missing sales forecasts. The Internet firm reported after the bell Tuesday.
The group delivered tepid third-quarter revenue growth and forecast weaker-than-expected sales in the fourth quarter as it continues to lose market share to rivals like Google.
In Europe, British chancellor George Osborne is due to outline government spending cuts, slashing benefits and public sector jobs with a five-year austerity plan aimed at clearing the nation's debts.
On the Calendar Next Week:
WEDNESDAY: Oil inventories, Beige book; Apple Mac Event, Richmond Fed. President Lacker speaks, Philadelphia Fed President Plosser speaks; after-the-bell earnings from eBay, E*Trade, Netflix and Seagate Technologies.
THURSDAY: ECB Meeting, jobless claims, leading indicators, natural gas inventories, money supply, Kansas City Fed President Hoenig speaks, CBO Director Elmendorf speaks; before-the-bell earnings from AT&T, Caterpillar, Credit Suisse, Eli Lilly, Novartis, Travelers, UPS, Continental Airlines, PNC Bank, Southwest Airlines, and Xerox; after-the-bell earnings from American Express and Amazon.
FRIDAY: G20 Finance Ministers & Central Bank Governor's Meeting; before-the-bell earnings from Verizon, Exelon, Ingersoll-Rand and Schlumberger.
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