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Futures Fall Amid Credit Fears; Autos Gain

Stock index futures pointed a lower open Wednesday as investors looked for further guidance from Treasury Secretary Timothy Geithner and the next batch of corporate earnings.

Stocks ended higher Tuesday as investors welcomed comments from Geithner that most banks are well capitalized. Focus will now shift to his speech at 9 am New York time in Washington on the government’s efforts to tackle the recession.

Credit worries continued to trouble the market after Capital One Financial reported earnings that were worse than expected and said it was feeling the pressure of defaults.

Capital One shares fell 7 percent in premarket trading while Dow component American Express was off 2 percent.

Wells Fargo shares also fell, moving lower by 1.3 percent even as the bank reported record earnings of $3.05 billion.

Morgan Stanley also contributed to the market's morning woes, falling 8 percent as the investment bank said credit troubles hampered earnings. The company's loss of 57 cents a share badly missed expectations of an 8-cent loss, and it cut its dividend to 5 cents a share.

Airlines, though, were doing better than expected as both Contintenal and Dow component Boeing posted earnings that, while weak, were better than analyst expectations. Boeing shares gained nearly 2 percent premarket.

Fellow Dow component AT&T also rose, picking up more than 4 percent premarket even as its earnings of 53 cents a share beat Wall Street expectations by a nickel.

Altria reported earnings of 39 cents per share that were about in line with expectations.

“The proof is in the pudding and that’s earnings … It’s pretty easy for these companies to look good because all the analysts are expecting the worst,” Jared Levy, senior derivatives strategist from Peak 6 Investments, told CNBC.

Automakers were the big gainers in premarket trading after the Obama administration said Tuesday it will make $5 billion available to General Motors and another $500 million for privately held Chrysler to help the companies get back on their feet.

Chrysler may be able to reduce its debts by offloading shares to some of its lenders. The troubled automaker’s first-lien lenders have offered to write off about 35 percent of the $7 billion owed in exchange for a stake in the company.

Shares of both GM and Ford rose nearly 9 percent.

European shares got a boost from bank stocks in early trading, but the Asian market ended mixed as investors remained cautious.

In London, attention will turn to Finance Minister Alistair Darling, who is set to unveil the UK’s annual budget, a key in the government’s attempt to mitigate the economic slump.

"The mood has changed such that people are now looking at the banks as a wonderful opportunity," Steve Massocca, managing director of Wedbush Morgan Securities, told CNBC.

Meanwhile, private equity fund Quadrangleis under investigation from New York City's pension funds over allegations it "intentionally misled" the fund to win business, a spokesman for the city's comptroller said.