Stocks point lower ahead of inflation reading

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NEW YORK — U.S. stocks headed for a moderately lower open Wednesday ahead of a key reading on inflation.

The decline in stock futures comes a day after Wall Street closed mostly lower and the Dow Jones industrial average logged its first close below 11,000 since July 2006.

Oil prices extended their pullback after falling sharply Tuesday amid concerns that a slowing economy will dampen demand. The drop in oil Tuesday did briefly draw bargain hunters into the stock market but the buying failed to hold.

But despite further declines in oil, investors remain worried about the economy and specifically the financial sector. This week has brought fresh attention to potential trouble spots in the mortgage market. Fannie Mae and Freddie Mac, the government-chartered mortgage giants, remain a concern, as do regional banks that have could have a large amount of bad mortgage debt on their books.

Investors will be looking ahead of the opening bell at the Labor Department's Consumer Price Index. Wall Street expects the government's primary inflation measure to show a 0.8 percent gain from May, according to the consensus estimate of Wall Street economists surveyed by Thomson/IFR. The data are due at 8:30 a.m. EDT.

Figures are also due on industrial production and minutes are also due from the last meeting of the Federal Open Market Committee, the arm of the Federal Reserve that sets interest rates. The Fed broke a string of reductions by leaving rates unchanged at its last meeting, a recognition that lower rates had weighed on the dollar and led to increases in commodities such as oil and food.

The economic concerns weighed on investors again Tuesday. Dow futures fell 43, or 0.39 percent, to 10,875. Standard & Poor's 500 index futures fell 4.50, or 0.37 percent, to 1,207.00, and Nasdaq 100 index futures declined $6.25, or 0.35 percent, to 1,792.75.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.81 percent from 3.82 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell 40 cents to $138.34 in premarket electronic trading on the New York Mercantile Exchange. Weekly government figures on domestic inventories are due during Wednesday's session.

Overseas, Japan's Nikkei stock average rose 0.05 percent. In morning trading, Britain's FTSE 100 fell 0.74 percent, Germany's DAX index declined 0.43 percent, and France's CAC-40 fell 0.88 percent.

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