Futures Slide Ahead of AIG and Fed

Stock index futures pointed to a lower opening Wednesday, following the previous day's rally, as investors remained wary for AIG's chief executive to step up to Capitol Hill and the Federal Reserve to conclude its two-day monetary policy meeting.

Even a report on IBM looking to buy Sun Microsystems failed to boost Nasdaq futures. Sun Microsystems shares were up more than 60 percent in premarket trading, while IBM shares came under pressure, falling 2.5 percent.

The morning's economic news had little effect on futures.

Consumer prices rose 0.4 percent in February, the biggest monthly gain since July. Excluding volatile food and energy costs, core CPI was up just 0.2 percent.

And the current account deficit narrowed sharply to $132.8 billion in the fourth quarter from an upwardly revised $181 billion in the third quarter.

It's a sign of the times that an expected grilling of AIG CEO Edward Liddy will likely garner more attention than what the Federal Reserve has to say.

But interest rates are expected to stay at the target of between 0 percent and 0.25 percent and economists say it's unlikely the Federal Open Market Committee will announce any new plans for the economy.

It would be nice to see a statement about any Fed plans for "quantitative easing" and buying Treasurys "but it appears in the last few weeks there is something holding them back," Jim O'Neill, head of global economic research at Goldman Sachs, told "Worldwide Exchange."

The Fed likely wants to hold off buying Treasurys as long as possible, and right now it will get "more bank for its buck in the mortgage market" helping to stem foreclosures and defaults," Simon Grose-Hodge, director of investment strategy at LGT Bank in Liechtenstein, added.

The Fed announcement will arrive at 2:15 pm New York time.

Meanwhile, hearings on AIG at the House Financial Services Committee will start at 10 am, as Congress looks for ways to prevent bonuses going to many employees in AIG Financial Products that were involved in the credit default swap crisis that endangered the company. (CNBC.com will stream the hearing live.)

CEO Liddy addressed the backlash against the bonuses in an Op-Ed in the Washington Post Wednesday, saying that paying the retention bonuses was necessary, but distasteful.

Looking to the tech sector, IBM is in talks to buy Sun Microsystems for at least $6.5 billion.

Also in deals, China rejected Coca-Cola's $2.4 billion bid for Huiyuan Juice.

In the auto industry, the quandary over whether General Motors will file Chapter 11 and enter a planned bankruptcy continues, with CEO Rick Wagoner saying he now is warming to the idea. GM shares gained 3.2 percent premarket on the news.

In financials, Citigroup shares picked up another 3.2 percent premarket even as the company was losing chief economist Lewis Alexander to the Treasury Department.

And shares of CNBC.com-parent General Electric edged lower premarket as the company prepares to give investors a full accounting Thursday of its commercial real estate portfolio.

As the last of the first-quarter earnings reports trickle in, Darden Restaurants reported that it beat analyst estimates even as net income fell 15 percent. The company raised its view for the full year but said sales would be flat or slightly lower.