Stocks were set to open lower on Wednesday, adding to the previous sessions losses and mirroring weakness in Europe as worries over tighter financial regulation put pressure on equities.

At 0845 GMT (4:45 a.m. ET), futures for the Dow Jones, the S&P 500 and the Nasdaq were down 0.9 to 1.2 percent.

Investors' confidence was rattled as Germany banned naked short sales of euro-denominated government bonds, credit default swaps based on those bonds, and shares in the country's 10 leading financial institutions.

Adding to jitters over financial regulation, several Republicans will vote with Democrats to wrap up debate on a sweeping rewrite of U.S. financial regulation and move toward final passage, Senate Majority Leader Harry Reid said on Tuesday.

U.S. stocks sank on Tuesday, with banks featuring among the biggest fallers on concern over financial regulation and worries about the sustainability of a global economic recovery.

In Europe, the pan-European FTSEurofirst 300 <.FTEU3> index of top shares fell 2.7 percent to below the 1,000 mark for the first time since the European Union announced a financial rescue package last week.

Highlighting the bumpy road ahead for the economy, White House economic advisor Paul Volcker said Europe's debt crisis shows the risks for the United States if it does not get its budget deficits under control.

Meanwhile, Treasury Secretary Timothy Geithner said a stronger Chinese yuan would help level the playing field for American exporters, but he would focus mainly on reducing trade barriers in talks with Beijing next week.

Regulators have still not been able to pinpoint the cause of the Dow Jones's massive drop nearly two weeks ago, but pushed ahead with new rules to restrict trading when markets are in free-fall.

After the closing bell on Tuesday, Hewlett-Packard Co reported results that beat expectations and the company raised its full-year earnings outlook. Its stock rose 2.5 percent to $47.97 in extended trade.

Companies reporting quarterly earnings on Wednesday include Target Corp., Polo Ralph Lauren, Limited Brands, Autodesk , Applied Materials , Deere & Co and Hormel Foods.

Google Inc's Android took fourth place in the first quarter in the number of smartphones sold which use it, overtaking Microsoft Corp's Windows Mobile, showing the increasing success of the search group's push into cellphones.

Notable economic data set for release on Wednesday include U.S. CPI number for April, due at 1230 GMT (8:30 a.m. ET).

Consumer prices are expected to have risen 0.1 percent in April, unchanged from March, providing more evidence that inflation is not a near-term concern for officials at the Federal Reserve after data on Tuesday showed a surprising dip in producer prices for the month.

The Mortgage Bankers Association (MBA) is expected to release its weekly index of mortgage applications at 1100 GMT (7a.m. ET).

(Reporting by Harpreet Bhal; Editing by David Holmes)