Stocks await Bernanke, Paulson

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NEW YORK (CNNMoney.com) -- U.S. stock futures pointed to a flat start Thursday as investors waited for Senate testimony from Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson.

The two will appear before the Senate Banking Committee, slated to start at 10 a.m. ET. Bernanke's comments will be the first by the Fed chairman since a number of closely watched readings convinced a growing number of top economists that the U.S. economy has already fallen into recession.

At 6:53 a.m. ET, Nasdaq and S&P futures were higher, although a comparison to fair value suggests a flat open for Wall Street.

In a TV interview Wednesday, Paulson said regulators plan to alter rules for packaging loans into bonds, but he said it would be "a number of months" before a working group in the administration would have recommendations on changes.

He also ruled out any support in the Bush administration for a second economic stimulus package on top of the $170 billion one signed Wednesday by the president.

The Wall Street Journal reported that major banks are talking to regulators about shifting some of the risk for troubled loans to the federal government. Among changes in laws reportedly being explored include expanding the scope of loans guaranteed by the Federal Housing Administration, and making it easier for banks to write off part of the unpaid balance on loans that exceed a property's value.

Swiss banking giant UBS AG (UBS) posted a fourth-quarter loss of $11.3 billion early Thursday after a $13.7 billion writedown of assets related to subprime mortgage securities in the United States in the period. The bank warned it "expects 2008 to be another difficult year."

Shares fell 5.6% in early Zurich trading, although stocks there and on other major European exchanges were higher in early trading.

Stock indexes in Asia also closed higher across the region, led by a 4.3% jump in Tokyo's Nikkei on a report that showed much stronger than forecast economic growth there.

U.S. stocks rallied Wednesday after a surprisingly strong January retail sales report helped soothe worries about a prolonged economic slowdown.

Stocks to watch Thursday include Yahoo (YHOO, Fortune 500) and News Corp (NWS, Fortune 500)., which Wednesday were said to be talking about a partnership that could help the Internet search engine fend off Microsoft (MSFT, Fortune 500).'s $44.6 billion takeover offer.

After the close Wednesday, the Justice Department announced it will allow two private-equity firms to go ahead with a $19.5 billion buyout of Clear Channel Communications (CCU, Fortune 500). Shares of the radio broadcaster gained 4.4% in after-hours trading on the news.

Late Wednesday, Hewlett-Packard (HPQ, Fortune 500) said it reached a financial settlement with the New York Times and three Business Week journalists who were spied on as part of the company's boardroom surveillance scheme. The size of the settlement was not disclosed.

Financial results are due before the open from Comcast (CMCSA), the nation's largest cable operator. Analysts are forecasting a 23% jump in earnings.

Economic reports due Thursday include the weekly reading on initial jobless claims and the December U.S. trade report, which is expected to show a narrower deficit from November levels.

Oil prices were higher in early trading; a barrel of light sweet crude rose 59 cents to $93.86 in early electronic trading.