Futures Turn Negative on Economic Jitters

Stocks were poised for a slightly lower open as investors grew jittery over a government report showing that housing starts took a dramatic decline in October.

New U.S. housing starts in October unexpectedly fell 10.6 percent to their lowest level in six months, weighed down by a sharp decline in construction activity for both single-family and multi-family dwellings.

At the same time, the consumer price index rose 0.3 percent, indicating that inflation may not be quite as benign as some economists have indicated.

The result pushed futures off their previous flat values when compared to fair value and into red numbers, with the Dow indicating a drop of about 25 points at the open.

Elsewhere, shares of Cadbury fell more than 1 percent in premarket trading as Hershey is reportedly thinking about entering an alliance for a friendly bid, to counteract the hostile bid for Cadbury by Kraft Foods.

Tobacco stocks could see action after JPMorgan raised its view on the sector and upgraded Reynolds American to "neutral" from "underweight."

At 10:30 am, the Energy Department will be out with its usual Wednesday release of oil inventory numbers, while the Mortgage Bankers Association is set for its 7 am release of weekly mortgage applications.

Retail earnings have been in focus this week as the holiday shopping season approaches - and today's light earnings calendar does include some more companies in that sector.

BJ's Wholesale shares fell 2.3 percent premarket as the warehouse club operator's profit for the third quarter that ended Oct. 31 fell to $17.7 million, or 32 cents a share, from $28.2 million, or 48 cents a share, a year earlier.

Limited Brands will have its quarterly numbers after the closing bell.

Among stocks to watch today: Salesforce.com, which matched forecasts with its after-the-bell earnings Tuesday, while Autodesk's latest numbers beat estimates.

Winterizing Your Portfolio - A CNBC Special Report
Winterizing Your Portfolio - A CNBC Special Report

Also in the news: Delta Air Lines and alliance partners are offering $1 billion to Japan Airlines to sway the money losing carrier from its affiliation with American Airlines.

Toyota posted its first year-over-year global sales increase in October in 15 months, with sales rising 5 percent.

A notable event occurs as the Dow chalks up its ninth gain in 10 sessions Tuesday: the blue chip average rose at the same time the dollar index gained ground.

At our request, CNBC's Rick Santelli did some digging and found that yesterday was only the 6th time in 24 sessions that this has occurred. Not astounding, but perhaps the start of an erosion of the dollar down=stocks up equation. Tuesday's small gains for the major averages put them once again at their highest closes in more than a year.

- Written by Peter Schacknow, Senior Producer, CNBC Breaking News Desk