U.S. stock index futures pointed to a lower open on Wall Street on Wednesday as investors awaited decisions from the Federal Reserve's two-day policy setting meeting.

European shares were slightly higher by mid-morning on Wednesday, paring gains after the number of UK jobless rose above 2 million, hitting British stocks.

The Federal Reserve finishes up its policy meeting and is expected to hold its target range for the benchmark overnight federal funds rate steady at zero to 0.25 percent, while indicating it will keep rates low for some time.

The Wall Street Journal reported that International Business Machines is in talks to buy Sun Microsystems in a combination that would bolster IBM's heft on the Internet, in data storage and in government and telecommunications areas, according to people familiar with the matter. Sun shares in Frankfurt surged 60 percent.

U.S. consumer prices are estimated to have risen modestly in February, boosted by a rise in gasoline prices, with the consumer price index excluding food and energy items rising just slightly.

Hewlett-Packard holds its annual meeting with an address by Chief Executive Mark Hurd. The technology giant is expected to continue to hold the line on costs amid tamped down expectations for a pickup in demand this year.

Oracle reports quarterly earnings. Analysts expect the company to earn 32 cents a share, excluding items, up from 30 cents a year earlier, according to Reuters Estimates.

Nike reports third-quarter results. Analysts expect the company to earn 79 cents a share, excluding items, down from 92 cents a year earlier, according to Reuters Estimates.

Starbucks hosts its annual shareholder meeting in Seattle. Investors will be looking for signs that the coffee chain has cut enough costs and closed enough stores to offset a sharp slowdown in consumer spending and cannibalization from overbuilding.

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.

The Dow Jones industrial average <.DJI> gained 178.73 points, or 2.48 percent, to 7,395.70. The Standard & Poor's 500 Index <.SPX> rose 24.23 points, or 3.21 percent, to 778.12. The Nasdaq Composite Index <.IXIC> jumped 58.09 points, or 4.14 percent, to 1,462.11.

(Reporting by Joanne Frearson; Editing by David Cowell)-