Stock Futures Pare Early Gains

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NEW YORK — Wall Street appeared headed to a muted opening Wednesday, a day after a move by the Federal Reserve and other central banks to pump more liquidity into distressed financial markets sparked a global rally.

The tone in markets around the world was clearly improved after investors sent stocks sharply higher on Tuesday, including a 416-point surge in the Dow Jones industrials, their biggest one-day point gain since 2002. Major Asian and European markets rose more than 1.3 percent on Wednesday.

However, those big gains might be short lived given the market's volatility in the past few weeks. And rattled investors might use recent gains to sell and take profits.

Dow futures, which earlier rose more than 25 points, pared their gains as the market opening approached. The indicator edged down 22, or 0.19 percent, at 12,168.

Standard & Poor's 500 futures were down 3.50, or 0.28 percent, at 1,320.50, while the Nasdaq 100 futures fell 3.00, or 0.17 percent, to 1,747.50.

Investors still remain cautious about economic data due out later this week, and what the Fed will do when it meets Tuesday. While Wall Street seems to want the Fed to cut interest rates further, there are also concerns that this still won't be enough to help the economy.

The Fed said Tuesday it plans to lend Treasurys in exchange for mortgage-backed securities and other battered debt that all but collapsed in the subprime mortgage crisis. Global financial institutions have written down almost $200 billion due to the credit crisis, and big U.S. investment banks next week are expected to report more losses when they issue first-quarter results.

There's also continued concern with the high-flying commodity markets as both oil and retail gasoline reach records. Commodities traders are waiting for government data during the session that is forecast to show crude oil inventories rose last week after an unexpected drop the previous week.

Ahead of that report, light, sweet crude fell 31 cents to $108.44 in electronic trading on the New York Mercantile Exchange. It was well below the trading record of almost $110 a barrel set Tuesday.

Treasurys are seen opening higher after the sharp sell-off Tuesday in reaction to the Fed's latest liquidity injection. The yield on the 10-year Treasury note, which moves opposite its price, fell to 3.56 percent in premarket trading from 3.59 percent late Tuesday.

In corporate news, Take-Two Interactive Software Inc. may advance after the company predicted profitability with the April release of its flagship "Grand Theft Auto IV" game. The company is in the midst of a $2 billion takeover bid by rival Electronic Arts Inc.

Caterpillar Inc. may also rise after it raised its sales forecast for 2010 by 20 percent, exceeding analysts' expectations.

Overseas, Japan's Nikkei 225 stock average rose 1.60 percent, while Hong Kong's market closed up 1.86 percent higher. In afternoon trading, Britain's FTSE-100 rose 0.96 percent, Germany was up 1.03 percent, and France added 1.53 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

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