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Futures Lower on Jobs Weakness, Debt Woes

U.S. stock index futures pointed to another rough day on Wall Street as investors grew worried over the slow pace of the employment recovery and more problems with European debt.

Separate reports showed both job gains in April and fewer planned layoffs, but the numbers left the market unsatisifed and pushed futures lower after being flat prior to the data releases.

Investors also worried about contagion in the European debt crisis as Moody's warned that it might cut its credit rating for Portugal.

Outplacement firm Challenger, Gray & Christmas said planned layoffs for April stood at 38,326, a drop of 43 percent to a four-year low. But the firm also said planned hires were likely to be slow.

The ADP National Employment Report showed the economy adding 32,000 jobs for the month, ostensibly better than market expectations of 30,000 but not enough to meet Wall Street sentiment.

Other early economic news saw mortgage applications reach a seven-month high.

A rising US dollar also could pressure equities, with the greenback up 0.54 percent against a basket of global currencies. Oil continued its trudge lower, falling to near $81 a barrel.

Strong earnings from Time Warner gave the markets something to cheer about early.

Like other media companies, Time Warner said ad revenue grew during the quarter as the company posted a profit of 62 cents a share. Its shares rose 2.7 percent in premarket trading.

Investors, though, remained divided on whether recent falls in the stock market signaled the start of a longer-term selloff or just a brief setback.

The correction in stock markets has already started, Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, told CNBC Wednesday.

But Tobias Levkovich, chief U.S. equity strategist at Citi, told CNBC that markets won't see a correction until June or July.

European stocks were mixed, but largely flat, as uncertainty of the Greek debt crisis and its potential for contagion remained.

European Union Commissioner Olli Rehn said there is no need to set up a bailout plan for Spain. But ECB Governing Council Member Axel Weber said there is a serious threat of Greece's problems spilling over to other parts of the euro zone.

Asian stocks ended mostly lower with concerns over European debt capping gains.

On the economic front, ADP will release its monthly reading of private-sector employment at 8:15 am New York time. The report will be a forerunner to Friday's release of the Labor Department's April employment numbers.

Elsewhere in the economy, at 10 am the Institute for Supply Management releases its nonmanufacturing index. Economists are looking for a reading of 56.0 for services activity this month, compared to a March reading of 55.4.

Among the earnings reports out ahead of the bell: Garmin, InterContinentalExchange, King Pharmaceuticals, PulteGroup and Qwest. CBS and JDS Uniphase are among those out with quarterly numbers after the closing bell.

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Intel unveils a new version of its Atom chip, featuring more efficient power consumption and cheaper cost. Nokia and Microsoft unveil their first software collaboration aimed at cutting into the market share enjoyed by Research-In-Motion's BlackBerry. This comes as Verizon Wireless begins selling Microsoft's "Kin" smartphone Wednesday.

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Former Bear Stearns CEOs James Cayne and Alan Schwartz will testify before the Financial Crisis Inquiry Commission later Wednesday on the collapse of the firm and its role in the financial crisis.