Futures Fall as Consumer Spending Slides 

U.S. stocks looked set to edge lower at the open on Wednesday as the positive reaction to the Federal Reserve's plan to buy mortgage-backed securities failed to bolster the futures.

News of the new stimulus strategy helped to push mortgage rates lower and stocks higher Tuesday. Stocks have so far held onto the majority of gains made in dramatic rallies on Friday and Monday.

"What rally we had was on decreasing volume so it's really a pretty easy bet — betting on the market going down as opposed to going up," Daniel Frishberg, chief investment officer at LafferFrishberg.com, told "Worldwide Exchange."

The state of the economy will be in sharp focus as we get the kitchen-sink day of economic reports ahead of the Thanksgiving holiday.

Consumer spending fell 1 percent last month, the sharpest drop in seven years, even as income rose 0.3 percent.

No more was that more evident than in spending on big-ticket items such as cars and appliances: Durable-goods orders tumbled 6.2 percentin October, more than double of what economists had expected. Excluding the volatile transportation component, orders were were nearly three times worse, falling 1.5 percent when economists had expected a 4.4-percent drop.

Meanwhile, it wasn't much better on the employment front: Jobless claims dropped more than expected last week, falling 14,000 to 529,000.

One bright spot was mortgage applications, which rose 1.5 percent last week as a drop in mortgage rates boosted demand.

Still to come: Chicago PMI numbers for November are out at 9:45 am. Then at 10 am, October's new home sales for October and final consumer sentiment numbers for November are released.

President-elect Barack Obama will try and further calm the markets during a press conference at 10:45 am where he's expected to give more details on plans to rescue the economy.

The chair of Obama's new economic advisory panel will be former Federal Reserve Chairman Paul Volcker, according to a report from the Wall Street Journal.

Investors remained wary of further downside for stocks while some tentatively hoped for a pre-Christmas rally.

"Sentiment is changing a little bit," said Nadav Baum, managing director of investments at BPU Investment Management in Pittsburgh. "I think the panic is subsiding and people are starting to look at stocks again — and credit markets — based on fundamentals and that's a good thing."

"We may be able to have a Santa Claus rally," Baum said.

Citigroup shares ticked higher in pre-market trading after the bank gained another high-profile investor last week as Inbursa, the investment firm controlled by Mexican billionaire Carlos Slim, bought roughly 26 million shares of the bank, sources told CNBC.

But other bank stocks declined, with Dow components Bank of America and JPMorgan down more than 3 percent, after a well-known analyst said U.S. banks will likely take another $44 billion in write-downs in the fourth quarter.

In a research report titled "Gobble Gobble," Oppenheimer analyst Meredith Whitney money pumped into the sector from the Troubled Asset Relief Program (TARP) won't spur meaningful growth in the industry as much of the capital raised will be offset by these write-downs.

On the earnings front, Deere and Tiffany will release results before the bell.