Wall St. shakes off inflation reading

NEW YORK (CNNMoney.com) -- Stocks remained poised to open lower Wednesday despite an in-line reading on consumer inflation, as ongoing credit concerns continued to trouble investors.

At 8:49 a.m. ET, Nasdaq and S&P futures were lower, pointing to another rough day for U.S. stocks, at least at the start. U.S. stocks have finished lower the past four sessions, with the blue chip Dow Jones industrial average losing more than 200 points Tuesday.

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Prices paid by consumers rose 0.1 percent in July, the Labor Department reported Wednesday morning, meeting economists' expectations.

The more closely watched core reading of the Consumer Price Index, which strips out volatile food and energy prices, was also in line with Wall Street expectations.

Treasury prices were higher after the CPI report, lowering the yield on the 10-year note to 4.71 percent from the 4.72 percent level reached Tuesday. The dollar eased against the euro and the yen.

The in-line inflation reading raised hopes that the Federal Reserve might feel free to cut interest rates in the face of the tightening credit crunch in global markets.

On Tuesday, the Producer Price Index, which measures wholesale inflation, came in higher than expected 0.6 percent rise for July, while the core PPI was up 0.1 percent, which was less than expected.

The New York Federal Reserve also issued its regional manufacturing survey or "Empire State" manufacturing index, which fell during the month of July.

Readings on industrial production and capacity utilization are due just before the U.S. markets open.

Sentiment was negative overseas. Asian stocks sank, sending Japan's Nikkei index to to its lowest level this year, and major European markets tumbled.

Oil prices rose in early trading ahead of the 10:30 a.m. ET reading on U.S. fuel inventories. The price of U.S. light crude gained 86 cents to $73.24 a barrel in electronic trading.

In corporate news, Applied Materials (Charts, Fortune 500), the leading maker of equipment used by chipmakers, posted a lower quarterly profit Tuesday that still beat forecasts. Still its shares fell nearly 4 percent in after-hours trading after its chief financial officer told analysts that the expected recovery in flat-panel display orders has not taken place.

AirTran Holdings (Charts) raised its hostile bid to buy rival Midwest Air Group (Charts) late Tuesday to $16.25 a share, or about $445 million overall, exceeding the value of a combined $16 a share bid accepted by Midwest over the weekend from private equity group TPG and Northwest Airlines (Charts, Fortune 500). Shares of Midwest gained nearly 7 percent in after-hours trading Tuesday, while shares of Nothwest edged slightly higher and AirTran fell slightly.

Warren Buffett's Berkshire Hathaway (Charts) disclosed late Tuesday that it had purchased 2.8 million shares of Dow Jones (Charts) earlier this year before the company sealed the deal to be purchased by News Corp. (Charts, Fortune 500) for $60 a share.

Berkshire's filing with the SEC also disclosed increased stakes in a number of the nation's largest banks, including Bank of America (Charts, Fortune 500).