U.S. stock index futures pointed to a lower open on Wednesday after a batch of corporate earnings mostly beat lowered expectations, but the key financial sector continued to show signs of weakness.
A third-consecutive quarterly loss at Morgan Stanley
There's fear of more losses across the financial spectrum. Regardless of what they did in the second quarter, the thought is there's more bad (news) to come, said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis.
You also have this coming in after a pretty good run, and the market is vulnerable because it is so extended.
S&P 500 futures fell 7.9 points and were below 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 lost 61 points and Nasdaq 100 futures dropped 5 points.
Also on Wednesday, Federal Reserve Chairman Ben Bernanke is set to continue his semi-annual Congressional testimony, with investors looking for clues on how the Fed plans to balance its actions to help the economy recover while avoiding weakening the U.S. dollar further.
Bernanke's testimony before the Senate Banking Committee begins at 10 a.m. EST.
U.S. shares gained ground on Tuesday as strong results from Caterpillar Inc
(Editing by Padraic Cassidy)