Futures Skid as Housing Report Disappoints

Futures tumbled Wednesday after a report showed housing starts fell much more than expected.

Housing starts dropped 10 percent to 593,000 in May; economists had expected a more modest decline to 650,000.

A separate report showed producer prices fell 0.3 percent last month, half of the decline expected.

The gains followed Tuesday's rally on Wall Street, as all major equity indices were up approximately 2 percent.

President Barack Obama said on Tuesday the US had a “national mission” to move away from reliance on oil and develop alternative sources of energy.

In his speech in the Oval Office, prompted by the environmental disaster caused by the oil spill from BP's ruptured well in the Gulf of Mexico, Obama cast the massive spill as an imperative for Congress to act quickly to overcome “a lack of political courage and candor.” BP shares in London was lower, while its New York-listed shares closed higher Tuesday.

US-traded shares of BP fell 4 percent in premarket trading and were off 2 percent in London.

Federal Express shares also were lower, falling 3 percent premarket after the economic bellwether reported earnings of $1.33 a share.

In other corporate news, Goldman Sachs is facing a wave of complaints from consumers over the business practices of its mortgage servicing unit, a subsidiary that collects payments on hundreds of thousands of loans worth tens of billions of dollars.

The initial public officer for the Chicago Board Options Exchange looks to have more momentum, a day after jumping 12 percent in its first day on the market.

Asian stocks rallied, after a number of successful European bond auctions eased investor concerns about the euro zone's sovereign debt crisis. The Nikkei rose 1.8 percent to a one-month closing high.

The European Commission on Wednesday denied a report that the European Union, the IMF and the U.S. Treasury were drawing up a liquidity plan for Spain including a credit line of up to 250 billion euros ($335 billion).

European shares edged up in early trade on Wednesday, extending a rally to six days by tracking gains on Wall Street where the S&P 500 lifted above its 200-day moving average.

Billionaire investor George Soros said that Europe faces almost inevitable recession next year and years of stagnation as policymakers' response to the euro zone crisis causes a downward spiral.

Famous investor Jim Rogers told CNBC that he bought the euro, as he said he would, but that he is skepticalwhen it comes to European governments' promises of austerity.

The price of oil fell from almost a one-month high as investors lost their appetite for commodities due to a stronger dollar, limiting crude’s appeal as an inflation hedge. Crude oil was at $76.63 a barrel after rising yesterday to $76.94, the highest closing price since May 6.

Still to come: At 9:15am, Industrial Production data will be released, with economists forecasting a rise of 0.8 percent in May, the same as in April, and at 10:30, crude inventories will be announced.

The corporate earnings calendar is light, with Fed Ex and IHS expected to release their latest financial results before the bell.