Stock Futures Fall as Rate Cut Enthusiasm Wanes

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NEW YORKWall Street headed for a lower open Wednesday after its big jump a day earlier, as investors' enthusiasm over historically low interest rates gave way to concerns about the nation's weak economy and struggling companies.

The Federal Reserve has cut its federal funds rate target to a range of zero to 0.25 percent — an unprecedented move aimed at boosting borrowing and lending. The central bank said Tuesday it anticipates the weak economy will keep the target rate low for "some time," and said it is mulling the possibility of buying Treasurys — in effect, printing new money.

In early trading Wednesday, yields on 10-year Treasury notes and 30-year Treasury bonds fell yet again to record lows.

The Fed's rate decision and statement had invigorated the market on Tuesday, lifting the Dow Jones industrial average more than 4 percent and other indexes more than 5 percent. But caution returned to Wall Street on Wednesday, with many investors starting to view the Fed's move as a sign of how dire the global financial situation really is.

The market was also waiting to see how Morgan Stanley fared in the fall. The bank is scheduled to report its fiscal fourth-quarter financial results Wednesday morning, and analysts forecast a loss of 34 cents a share.

Ahead of the market's open, Dow Jones industrial average futures fell 109, or 1.23 percent, to 8,782. Standard & Poor's 500 index futures fell 12.90, or 1.41 percent, to 899.90, while Nasdaq 100 index futures fell 9.00, or 0.73 percent, to 1,232.00.

In economic data Wednesday, the government is scheduled to release its reading on the current account deficit for the third quarter, while the Mortgage Bankers Association will report on weekly mortgage applications.

In other news, Securities and Exchange Commission Chairman Christopher Cox blamed regulators for a decade-long failure to investigate Wall Street money manager Bernard L. Madoff, now accused of running a $50 billion Ponzi scheme. Cox said staff attorneys never bothered to seek a formal commission-approved investigation that would have forced Madoff to surrender vital information under subpoena.

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

Light, sweet crude rose $1.45 to $45.05 a barrel in electronic premarket trading on the New York Mercantile Exchange.

Markets overseas were mixed. Japan's Nikkei stock average rose 0.52 percent, while Hong Kong's Hang Seng index rose 2.18 percent. In late morning trading, Britain's FTSE 100 rose 0.57 percent, Germany's DAX index fell 0.25 percent, and France's CAC-40 fell 0.16 percent.