Futures Slide on Big Bank Earnings Day

Stock index futures were lower Wednesday, indicating a pullback following the biggest gains for stocks since Jan. 4.

Stocks faced a variety of pressure this morning, not least among them a wobbly start to earnings season.

In after-the-bell earnings Tuesday, Dow component IBMbeat estimates and upped its guidance, but top-line revenue was weak and the stock dropped 1.8 percent in premarket trading.

Bank of America led a parade of banks to report, disappointing investors with a loss of $5.2 billion equating to 60 cents a share, worse than the expectation of 52 cents per share. BofA shares gave up 2.3 percent premarket.

On the positive side, Wells Fargo shares rose 2.4 percent premarket after the company posted an unexpected profit of 8 cents a share, despite having to repay $25 billion in government bailout money.

Morgan Stanley shares gained 1.7 percent while Bank of New York Mellon rose 4.3 percent and US Bancorp was up 1.6 percent as investors digested positive earnings news from those institutions.

Also on tap are Hudson City Bancorp, Marshall & Ilsley, M&T Bank, and State Street. Notable after-the-bell earnings reports this afternoon include eBay, Logitech, Starbucks, Sallie Mae, Seagate Technology, and Xilinx.


Stocks also faced pressure from a rising US currency, with the dollar index up 0.7 percent and currency prices broadly lower. Oil fell below $78 a barrel.

Economic data did little to move the markets, even though the government reported that housing starts fell unexpectedly in December. A separate report showed essentially flat producer prices.

Also in the mix: the victory for Republican Scott Brown in the Massachusetts Senate race, which some people say could create the type of Congressional "gridlock" that often results in higher markets.

While sorting through this morning's banking industry numbers, investors will also have economic data to digest. The government is out with December Producer Price Index (PPI) numbers, with economists looking for the headline number to be unchanged, and the core rate (ex-food and energy) up 0.1 percent. December housing starts are expected to fall by 0.2 percent, with building permits increasing by 0.2 percent. Both PPI and housing starts will be out at 8:30 am New York time.

The Mortgage Bankers Association said demand for home loans rose 9.1 percent last week as mortgage rates hit a one-month low. The EIA will not be out with its usual weekly report on oil inventories due to Monday's holiday. Instead, the weekly inventory report will be out Thursday at 11 am.

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

Shareholders in Warren Buffett's Berkshire Hathaway will vote today on a 50-1 stock split for Berkshire's class B shares (BRK/B), paving the way for the company's deal to buy Burlington Northern. Such a split could also pave the way for Berkshire's inclusion in the S&P 500.

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