Stock futures were little changed on Wednesday as a report that IBM
Sun Micro shares jumped more than 60 percent to $8.02 before the bell after the Wall Street Journal reported that International Business Machines Corp, a Dow component, could buy the company for at least $6.5 billion.
Tech has pretty much outperformed the market. Anytime you see M&A it's usually a good sign, said Andre Bakhos, president of Princeton Financial Group in New Brunswick, New Jersey. It's a positive that somebody is finding value, but at the same time the negative is that somebody is going to lose their job.
S&P 500 futures were off 2 points and were near break-even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures shed 24 points, and Nasdaq 100 futures added 2.50 points.
A day after the market made another advance following the 12-year lows reached earlier this month, investors were also fretting about the fallout from the mounting furor over bonuses paid to executives of embattled insurer American International Group
Given that the AIG bonus situation has caused a political stir, it appears the administration is losing focus on the real problem which is getting the economy back on track, said Bakhos.
The Obama administration has turned up the heat on AIG, saying the insurer will be forced to repay U.S. taxpayers before it gets another bailout of $30 billion. Its chief executive is due to testify before a Congressional panel on Wednesday.
On the policy front, Wednesday marks the conclusion of the Federal Reserve's 2-day policy-setting meeting. With the U.S. central bank having cut interest rates close to zero, investors' focus will be on whether it would commit itself to buy long-dated government debt as an additional measure to revive the economy.
The Fed's statement on the meeting is due around 2:15 p.m. EDT.
The economic calendar also includes the release of the February Consumer Price Index at 8:30 a.m. EDT.
U.S. stocks surged on Tuesday as an unexpected leap in housing starts pushed Home Depot and other retailers higher while bullish comments from a broker on Cisco Systems helped technology shares rebound.
(Editing by Chizu Nomiyama)