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 Economists surveyed by Thomson Financial/IFR expect the Labor Department to report a 0.3 percent increase in the consumer price index, and a 0.2 percent increase in the core consumer price index, which strips out energy and food prices. Bigger jumps could elevate worries that the Federal Reserve might be hesitant to stoke the economy through more interest rate reductions.
Investors were also cautious ahead of Wednesday's Commerce Department report on January housing starts and building permits, as well as the Federal Reserve's minutes from its last meeting. On Jan. 30, the Fed decided to lower key interest rates by a half-point to 3 percent, following an emergency three-quarter-point cut the prior week.
Dow Jones industrial average futures dropped 76, or 0.61 percent, to 12,312. Standard & Poor's 500 index futures fell 9.30, or 0.69 percent, to 1,346.10, and Nasdaq 100 futures fell 9.50, or 0.53 percent, to 1,772.00.
As oil closed above $100 for the first time Tuesday, the stock market gave up its sizable gains and finished mixed. On Wednesday, in premarket electronic trading, crude on the New York Mercantile Exchange fell 99 cents to $99.10 per barrel.
Wall Street remains worried that inflation could accelerate at the same time the economy suffers under tough credit conditions. The phenomenon of slowing growth and surging prices is known as stagflation.
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 On Wednesday, the Financial Times reported that KKR Financial Holdings LLC, a listed affiliate of U.S. private equity group Kohlberg Kravis Roberts & Co., has delayed repayment of billions of dollars of commercial paper for the second time. Commercial paper are short-term bonds companies sell to quickly raise cash; demand for commercial paper began drying up last year, constipating the credit markets.
In earnings news, Hewlett-Packard Co. late Tuesday posted a 38 percent surge in fiscal first-quarter profit thanks to an increase in computer sales. Hewlett-Packard shares rose in pre-market trading.
Meanwhile, a $20 billion deal to combine Delta Air Lines Inc. and Northwest Airlines Corp. is in danger, according to two people close to the discussions, because of an impasse among pilot negotiators over how to determine seniority for the 12,000 pilots involved.
The dollar was mixed against major currencies.
Overseas, Japan's Nikkei stock average closed down 3.25 percent. In afternoon trading, Britain's FTSE 100 dropped 1.38 percent, Germany's DAX index lost 1.23 percent, and France's CAC-40 fell 1.11 percent.
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On the Net:
New York Stock Exchange: http://www.nyse.com/
Nasdaq Stock Market: http://www.nasdaq.com/
[Associated Press; By MADLEN READ]
Copyright 2008 The Associated Press. All rights reserved. This
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