Futures Drift Lower on Global Concerns

Stock index futures slumped ahead of the open Wednesday after Tokyo stocks once again tumbled and the crisis at the tsunami-hit nuclear power plant north of Tokyo appeared far from over.

The United States became the first nation to block some food imports from Japan and Japanese authorities advised against allowing infants to drink tap water in Tokyo due to raised radiation levels.

Japan estimated the direct damage from the earthquake and tsunami to be 16-25 trillion yen ($185-308 billion), making it the costliest natural disaster ever.

In Europe, Minutes for the Bank of England’s latest meeting published Wednesday morning showed the Bank’s Monetary Policy Committee remained split over the need to hike rates.

Events in Japan should reduce hawkishness, but a rate hike in May still looks likely, analysts said, particularly in light of soaring inflation. The European Central Bank has also hinted it may raise rates in the near future.

Investors will keep a close eye on comments by U.S. Federal Reserve Chairman Ben Bernanke, who speaks to the Independent Community Bankers of America convention at 12 p.m.

Traders are also watching for oil inventory data from the government at 10:30 a.m. as the conflict in Libya and tensions in Yemen and Syria continue to drive prices higher. Oil pricesrose as tensions in the Middle East and North Africa continued. London Brent crude traded above $115 a barrel, while U.S. light sweet crude traded above $104 a barrel.

Egypt’s stock market reopened Wednesday morning after a two-month suspension put in place when stocks plunged as a revolution shook the country. Trading was halted just moments after the bourse reopenedwhen circuit breakers kicked in, but later resumed, with further heavy selling by foreign investors.

Europe’s sovereign debt crisis could add to uncertainty Wednesday as Portugal’s parliament votes on the government’s austerity measures.

The vote could spell the collapse of the government and further trouble for the debt-battered country.

In corporate news, Bank of America fell after news the Federal Reserve did not giving the banking giant the go ahead to raise its dividend. The bank said it will seek permission to provide a modest dividend in the second half of 2011.

Adobe Systems declined after reducing its revenue forecast for Japan by one third.

And Toyota slumped as it said the disaster in Japan will delay the Japan launch of two new Prius models due to production disruptions.

Motricity , which provides a technology for non-smartphones to surf the Internet, continued to rise in after-market trading. (Read more: Cramer: This Tech Stock Is 'Misunderstood.')

On the U.S. economic front, the Mortgage Bankers Association'sseasonally adjusted index of mortgage application activity rose 2.7 percent for the week ended March 18.

New home sales will be reported at 10 a.m. Economists surveyed by Reuters expect new sales will rise to an annual rate of 290,000 from 284,000 in January.

On Tap This Week:

WEDNESDAY: Caterpillar analyst meeting; annual meetings for Disney, HP and Starbucks; new home sales, oil inventories.
THURSDAY: EU summit; durable goods, jobless claims, natural gas inventories, 10-year TIPS auction, money supply; before-the-bell earnings from Best Buy and ConAgra; after-the-bell earnings from Oracle, Research in Motion.
FRIDAY: USDA food prices outlook; GDP revision, corporate profits, and consumer sentiment.

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