Stocks set for rough start

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Investors brace for economic news Wednesday and will focus on minutes from Fed's last meeting. Play video

LONDON (CNNMoney.com) -- U.S. stocks looked set for a rough open Wednesday as fresh fears in the credit markets, high oil prices and a rise in inflation rattled investors.

About an hour before the start of trading, futures were lower, with a comparison to fair value indicating a negative start for the broader market and slight gains for the tech-heavy Nasdaq.

Credit fears were reignited by a unit of private-equity firm KKR. KKR Financial (KFN) said in a SEC filing that it is in restructuring talks with creditors after delaying repayment of billions of dollars of short-term debt.

The disclosure, which was first reported by the Financial Times, reignited worries about tight conditions in the commercial paper market, a major source of short-term financing on which banks and companies rely.

Oil closing at more than $100 a barrel for the first time ever on Tuesday also weighed on futures. A spike in oil prices caused a turnaround on Wall Street that resulted in stocks erasing earlier gains.

"Energy prices drove the market last night, and they're driving it this morning," said Art Hogan, chief market analyst at Jefferies & Co.

Crude retreated slightly Wednesday, falling 71 cents to $99.30 a barrel in electronic trade.

On the economic front, a key reading on inflation came in slightly above estimates and while housing starts and permits were roughly in-line.

The Consumer Price Index rose 0.4% in January, while the core figure that excludes food and energy rose 0.3%. Analysts expected a 0.3% rise in overall inflation and a 0.2% rise in the core number.

Inflation has been a growing concern as the Federal Reserve cuts interest rates despite soaring prices for commodities like oil, wheat and corn. Analysts fear stagflation - a period of both low economic growth and high inflation - could could set into the economy.

Perhaps just as closely watched will be the minutes from the Fed's meeting last month, due at 2 p.m. ET.

Among stocks to watch, Hewlett-Packard (HPQ, Fortune 500) posted upbeat quarterly sales and earnings after the market close Tuesday. Shares jumped nearly 6% in after-hours trading.

In global trade, Asian markets fell sharply. European shares also sank in midday trading.