Stocks wait for Big Ben

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LONDON (CNNMoney.com) -- U.S. stock futures fell Wednesday after a reading on economic growth came in much weaker than expected and investors grew nervous ahead of the Federal Reserve's decision on interest rates.

Less than an hour before the market open, Nasdaq and S&P futures were lower, suggesting a weak start for Wall Street.

The economy grew by an anemic 0.6% in the last quarter of 2007, according to a first reading of the nation's gross domestic product. Analysts were looking for growth of 1.2%, still slow compared to the 4.9% in the third quarter.

The GDP reading, which paints a picture of the overall economy, comes as many economists say the nation is headed for recession. The traditional sign of a recession is two or more quarters when economic activity declines rather than grows.

Stocks have rallied the last two sessions, lifted by hopes that the Fed will cut interest rates by another half of a percentage point to 3% today. The Fed statement is due at 2:15 p.m. ET.

But investors are also nervous that the central bank may not slash rates so aggressively, especially given the three-quarters of a percentage point emergency rate cut it made the last week.

Among stocks to watch, Boeing (BA, Fortune 500) reported earnings before the bell that beat Wall Street estimates but lowered its guidance for 2008, citing delays in its 787 Dreamliner. Nonetheless, shares rose over 1% in premarket trade.

Drugmaker Merck (MRK, Fortune 500) posted higher-than-expected operating profit and reaffirmed its full-year guidance, sending shares higher 2%.

Search engine Yahoo reported earnings after the bell Tuesday that beat estimates, but CEO Jerry Yang warned that the company faces "headwinds" this year. Yahoo (YHOO, Fortune 500) shares fell 10 percent in after-hours trading.

Swiss bank UBS said Wednesday it's expecting to take a $14 billion writedown in the fourth quarter related to subprime losses in the U.S. housing market. The company expects a $4 billion full-year loss when it reports earnings Feb. 14.

And Wal-Mart (WMT, Fortune 500) is restructuring its sluggish clothing business and laying off dozens of people at its corporate headquarters for the first time in years, according to a report in the New York Times.

Overseas, Asian markets finished in negative territory and European stocks fell at the start of trading on fears over the health of the U.S. economy.

Oil prices rose on expectations the Fed will cut interest rates. U.S. light, sweet crude for February delivery added 91 cents to $92.55 a barrel in electronic trading.

The dollar rose against the euro and fell versus the yen.