U.S. stock index futures pointed to a mixed open on Wall Street on Wednesday, with futures for the S&P 500 down 0.11 percent, Dow Jones futures down 0.41 percent and Nasdaq 100 futures up 0.03 percent at 1049 GMT.

The dollar extended gains on Wednesday on a spike in U.S. Treasury yields as Washington's proposed extension of tax cuts brightened the outlook for U.S. growth but raised fears of fiscal deterioration.

The 10-year U.S. Treasury yield rose to 3.25 percent, a level not seen since late June and beyond Tuesday's high of 3.18 percent.

Oil fell for a second day, dragged by the rise in the greenback and after an industry report showed a larger-than-expected increase in the country's gasoline stockpiles.

European shares were up 0.2 percent in morning trade, extending their week-long rally and flirting with a two-year high, as prospects for further economic recovery outweighed lingering worries about sovereign debt levels in the euro zone.

North Korea fired artillery shells in a suspected military drill on Wednesday, spooking markets on an already tense peninsula, as the top U.S. military official warned of more provocations from Pyongyang's bad guy.

U.S. retailer Costco Wholesale Corp posted a better-than-expected quarterly profit as sales and traffic grew at its U.S. stores and the weakening dollar helped sales overseas.

CBS Corp Chief Executive Leslie Moonves is optimistic about 2011 advertising trends and expects the brisk pacing of ad revenue growth to continue in the first quarter.

Microchip bellwether Texas Instruments Inc said it was confident a recent demand correction would be short-lived and narrowed its quarterly earnings guidance in line with analysts' expectations.

Fortune Brands Inc , which owns brands ranging from Jim Beam whiskey to Titleist golf balls and faucet manufacturer Moen, plans to split into three companies, a source familiar with the situation said on Tuesday. An announcement is expected on Wednesday, the source said.

U.S. private equity firm Blackstone Group is in talks to join a bid by China's Bright Food Group Co for U.S. healthcare products seller GNC Holdings Inc, a source familiar with the situation said on Wednesday.

Economic indicators on tap for Wednesday include the release of the Mortgage Bankers Association's Mortgage Market Index for the week ended December 3.

U.S. stocks eked out a small gain on Tuesday as investors' enthusiasm over a tax cut extension deal was short-circuited by rising bond yields and reports regulators were stepping up an insider-trading probe.

The Dow Jones industrial average <.DJI> dropped 3.03 points, or 0.03 percent, to 11,359.16. The Standard & Poor's 500 Index <.SPX> added 0.63 points, or 0.05 percent, to 1,223.75. The Nasdaq Composite Index <.IXIC> gained 3.57 points, or 0.14 percent, to 2,598.49.

(Reporting by Blaise Robinson; Editing by Hans Peters)