WARY ABOUT ITALY

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NEW YORK (CNNMoney) — U.S. stocks headed for a lower open Wednesday, after Italian Prime Minister Silvio Berlusconi’s pledge to step down failed to calm world markets.

The Dow Jones industrial average (INDU), SP 500 (SPX) and Nasdaq (COMP) futures fell more than 1% ahead of the opening bell. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Berlusconi is expected to resign, following the approval of a new budget law that is currently making its way through parliament. And while his pending departure allows investors to scratch off one item on Europe’s long list of worrisome questions, it also raises new questions about the country’s future.

Early Wednesday, Italian bond yields spiked above 7% — the level at which other countries have had to seek bailout packages.

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U.S. stocks staged a relief rally Tuesday, finishing near the highs of the day after Berlusconi agreed to resign.

Bank stocks were among the big gainers in the prior session, with Wells Fargo (WFC, Fortune 500), Citigroup (C, Fortune 500), Goldman Sachs (GS, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Morgan Stanley (MS, Fortune 500) rising more than 2%. Bank of America (BAC, Fortune 500) shares also rose.

Companies: Companies including General Motors (GM, Fortune 500), Macy’s (M, Fortune 500) and Liz Claiborne (LIZ) will release their quarterly results before the bell on Wednesday.

Also on tap Wednesday are Dean Foods (DF, Fortune 500) and CISCO Systems (CSCO, Fortune 500).

Economy: Reports on inventories and mortgage applications will be released on Wednesday morning.

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Mortgage applications, tallied by the Mortgage Bankers Association, increased 0.2% for the week ending October 28 — the most recent reporting period.

Analysts surveyed by Briefing.com expect wholesale inventories to have increased by 0.5% for the month of September, after increasing 0.4% in the month prior.

World markets: European stocks sank in morning trading. Britain’s FTSE 100 (UKX) dropped 1.6%, the DAX (DAX) in Germany tumbled 2.2% and France’s CAC 40 (CAC40) shed 2%.

Asian markets ended higher. The Shanghai Composite (SHCOMP) ticked up 0.8%, the Hang Seng (HSI) in Hong Kong jumped 1.7% and Japan’s Nikkei (N225) climbed 1.2%.

Currencies and commodities: The dollar rose against the euro, the British pound and the Japanese yen.

Oil for December delivery slipped $1.14 to $95.66 a barrel.

Gold futures for December delivery fell $14.80 to $1,784.80 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 1.97% from 2.06% late Tuesday.  To top of page

Article source: http://rss.cnn.com/~r/rss/money_topstories/~3/zBFu21ff2xU/index.htm

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