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 On Tuesday, the Dow Jones industrial average shot up 420 points after the Federal Reserve cut its key interest rate by three-quarters of a percentage point. Investors were relieved as well to see two investment banks
-- Lehman Brothers Holdings Inc. and Goldman Sachs & Co. -- report better-than-expected quarterly profits.
But Morgan Stanley's earnings are on tap Wednesday, and the rest of Wall Street is going to want to see if the investment bank is relatively healthy like Lehman or Goldman, or at risk of failure like the recently bought out Bear Stearns Cos.
A pullback was to be expected given the magnitude of Tuesday's gain and investors' concerns about the many unknowns that remain not only about the financial sector, but the overall economy as well.
Dow Jones industrial average futures fell 65, or 0.52 percent, to 12,340. Standard & Poor's 500 index futures fell 8.30, or 0.62 percent, to 1,325.70, while Nasdaq 100 index futures fell 10.0, 0.56 percent, to 1,761.0.
Bond prices rose. The yield on the benchmark 10-year Treasury note, which move opposite its price, fell to 3.40 percent from 3.50 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude fell 87 cents to $108.55 per barrel in premarket electronic trading on the New York Mercantile Exchange.
Late Tuesday, Visa Inc. launched the largest initial public offering in U.S. history, selling 406 million shares at $44 each to raise $17.9 billion. The world's largest credit card processor
-- unlike Discover Financial Services, which releases earnings on Wednesday, and American Express Co.
-- is not a lender, and many investors are betting that it will easily survive the faltering U.S. economy and credit climate.
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 The Fed has slashed key rates by more than half since last summer, when the mortgage crisis claimed its grip on the global credit markets. But the housing and lending industries are still hurting.
The government is expected on Wednesday to loosen the capital restraints on mortgage-finance companies Fannie Mae and Freddie Mac, so they can play larger roles in the struggling housing market. The Office of Federal Housing Enterprise Oversight, which oversees the government-sponsored companies, was announcing the plan Wednesday, people familiar with the matter said Tuesday.
Meanwhile, after JPMorgan Chase & Co.'s announcement Sunday that it was buying out the troubled investment bank Bear Stearns Cos., French bank BNP Paribas SA said Wednesday it is no longer interested in making a takeover bid for rival, Societe Generale. Societe Generale has been hurting after a rogue futures trader logged $7 billion in losses.
Stock markets overseas were mixed after Wall Street's jump on Tuesday. Japan's Nikkei stock average increased 2.48 percent, while Hong Kong's Hang Seng index rose 2.26 percent. In midday trading, Britain's FTSE 100 slipped 0.98 percent, Germany's DAX index lost 0.71 percent, and France's CAC-40 declined 0.58 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
material may not be published, broadcast, rewritten or
redistributed.
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