Stock rally runs out of steam
Futures suggest slightly higher start for stocks just a day after the Fed's move to inject liquidity sparked sizzling rally.
NEW YORK (CNNMoney.com) -- Stocks looked to open slightly higher Wednesday as investors exercised some caution after stocks posted their biggest one-day rally in years.
Less than a half hour before the open, Nasdaq and S&P futures were mixed. But they were slightly higher compared to fair value.
Stocks staged an eye-popping rally Tuesday after the Fed pumped an additional $200 billion into the banking system to provide additional liquidity to credit markets. The Dow finished the session 417 points higher and posted its best day in 5-1/2 years.
But investors are likely to show some restraint after yesterday's move as they await Thursday's retail sales reading, Friday's consumer inflation report and next week's Federal Reserve meeting, said Marc Pado, U.S. market strategist at Cantor Fitzgerald.
"If we can hold onto the lion's share of yesterday's gains that would really be considered a victory," Pado said.
Oil prices eased but remained propped up by the weak dollar. Investors will be paying particularly close attention to the latest reading on U.S. crude oil inventories at 10:30 a.m. - among the few major economic readings for the session.
The latest reading on mortgage applications revealed a 1.9 percent decline from the previous week, the Mortgage Bankers' Association reported, as interest rates headed higher.
Among companies to watch, Freddie Mac (FRE, Fortune 500) and Fannie Mae (FNM) may have to issue in excess of $10 billion in new stock this year as the government-sponsored mortgage lenders continue to serve as a backstop for the deteriorating housing market, The Wall Street Journal reported Wednesday.
Take-Two Interactive (TTWO) posted a bigger-than-expected loss late Tuesday but raised its outlook for 2008. The video game publisher also reiterated its rejection of a $2 billion buyout offer from rival Electronic Arts (ERTS).
And Japanese officials are investigating a possible defect in the lithium-ion battery in Apple Inc.'s (AAPL, Fortune 500) iPod Nano model after a report that the digital music player emitted sparks while recharging, officials told the Associated Press.
Light, sweet crude for April lost 17 cents to $108.58 in electronic trading. The front-month contract hit a new trading record below $110 a barrel Tuesday.
Gold prices inched higher. COMEX gold for April rose 50 cents to $976.50 an ounce.
Overseas, Wall Street's optimism spilled over to other worldwide markets as Asian markets finished the session higher and European stocks soared at midday.
The dollar fell as traders shrugged off the Fed's move. The greenback slipped against both the yen and euro. 
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