Stocks were poised for a lower open on Wednesday after Moody's downgrade of Portugal's credit rating to junk and China's interest rate rise sparked jitters about global growth prospects.
The downgrading of Portugal's credit rating to junk shocked financial markets and cast new doubt on European efforts to rescue distressed euro zone states without debt restructuring.
The European debt crisis continues, those problems are still out there, said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.
Maybe we want a quick fix, maybe we are looking for one, but there is no quick fix and if there is I haven't heard it yet.
China's central bank increased interest rates for the third time this year on Wednesday, making clear that taming inflation is a top priority as its economy gently slows.
It is expected but it's not a positive, maybe it doesn't say sell, but it definitely doesn't say buy, said Lesh.
S&P 500 futures dropped 7.2 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 46 points, and Nasdaq 100 futures declined 8 points.
U.S. economic data on tap for Wednesday includes the Institute for Supply Management's non-manufacturing index, due at 10 a.m. <1400 GMT>. The gauge is expected to show a slight dip to 54.0 in June from 54.6, according to a Reuters poll, the second-lowest reading since August.
Volume is expected to be low in the holiday-shortened week, which could increase volatility. Markets were closed on Monday for U.S. Independence Day.
In company news, Berkshire Hathaway Inc
U.S. pipeline safety regulators on Tuesday said Exxon Mobil
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)