Woeful on Wall Street

Futures point to lower open as Fed prepares to start two-day meeting; subprime worries plague markets worldwide.

NEW YORK.. Stock futures pointed to another weak session Wednesday as investors remained nervous about subprime concerns and the latest economic readings ahead of the start of a two-day Federal Reserve meeting.

S&P and Nasdaq futures edged higher at about 6:30 a.m. ET but a comparison to fair value pointed to a negative opening for U.S. stocks.

Stocks have had trouble finding their footing this week amid ongoing concerns about the subprime mortgage sector. The Dow has rallied more than 100 points each of the last two days but the gains were thwarted by selloffs late in each of the sessions.

"There's continued worries about subprime and what might happen," said Peter Cardillo, chief market economist , Avalon Partners. "I think that we probably are heading for another nervous day."

After the close Tuesday, Wall Street investment bank Bear Stearns (Charts, Fortune 500) said it does not plan to bail out the second of two struggling hedge funds. The problem in the funds helped start the current slide in U.S. stocks last week. Bear Stearns cited stabilizing markets, but Bill Gross, the manager of the largest bond fund in the world, said the subprime crisis was not isolated and would eventually take a toll on the U.S. economy.

Treasury prices edged higher, trimming the yield on the 10-year note to 5.06 percent from 5.08 percent late Tuesday. Bond prices and yields move in opposite directions.

Oil fell in early trading, ahead of the 10:30 a.m. ET report on U.S. fuel inventories. U.S. light crude lost 41 cents to $67.36 a barrel in electronic trading.

Investors will take in a report on durable goods orders as well as the government's weekly report on crude inventories. The durable goods reading is forecast show a 1 percent decline in demand for big ticket items in May after a 0.8 percent rise in April, according to economists surveyed by Briefing.com.

Fed policymakers also meet today, but their closely watched statement isn't due until Thursday. Economists widely expect the central bank to hold rates steady.

In global trade, European shares fell at the open, and markets in Asia had another losing session. The dollar rose against the euro but fell versus the yen in early trading.

In major corporate news, software maker Oracle (Charts, Fortune 500) reported a jump in quarterly profit late Tuesday. The results beat the consensus forecast of analysts, and the company also issued an upbeat outlook for the current quarter. Shares of the tech bellwether gained 0.6 percent in after-hours trading, but slipped 0.4 percent in early Frankfurt trading.

Nike (Charts, Fortune 500) reported fourth-quarter profit rose by nearly a third on surprisingly strong sales of its shoes and apparel, as it beat forecasts. Shares gained more than 5 percent following the after-hours report.

Underwriters pulled a $1.5 billion bond offering that was to be used to finance the purchase of U.S. Foodservice from Royal Ahold (Charts) by two private equity firms - the latest sign that the trouble in the debt markets could put a crimp in the recent buyout boom.