Lower start seen for stocks
U.S. markets wary ahead of reports on oil supply and services sector.
NEW YORK (CNNMoney.com) -- U.S. stocks were set to open lower Wednesday and oil prices were down as investors focused on the services sector.
With about an hour left before the opening bell, Dow, Nasdaq and S&P futures were lower. Stocks closed lower Tuesday on a dreary economic outlook from Federal Reserve Chairman Ben Bernanke and reports that Lehman Brothers (LEH, Fortune 500) will raise capital.
Markets Oil prices fell below $124 a barrel overnight on the comments of Bernanke, who also indicated there will be no further interest rate cuts due to concern about inflation .This is far below the $135 peak in May.
The markets await the government's weekly inventory report, due after the opening bell.
Gasoline hit set a record high on Wednesday for the 27th time in 28 days, according to the motorist group AAA, rising to a nationwide average of $3.983 per gallon of regular unleaded.
In his Tuesday speech, Bernanke voiced concern about the weak dollar, which might have helped with its slight boost against the euro. But the dollar slipped against the yen.
Asian stocks ended mixed, with Tokyo's Nikkei index up 1.6%. European markets opened lower.
Economy: Economic reports due Wednesday morning include a revised reading on first-quarter productivity before the market open. Economists surveyed by Briefing.com see a boost to a 2.5% gain from the originally reported 2.2% advance.
Also on tap, after the open, is the Institute for Supply Management's report on the services sector. The index is expected to slip to 51 for May from April's 52. Any reading over 50 signals expansion in the sector.
United Airlines: UAL Corp's United Airlines announced Wednesday it will ground 100 of its airplanes from its domestic fleet in a cost-cutting move. United said between 2008 and 2009, the company will reduce its domestic capacity by about 17% or 18% due to soaring fuel costs. Stock (UAUA, Fortune 500)
Merger announcement: The J.M. Smucker Company (SJM), maker of jams and peanut butter, agreed to purchase Procter & Gamble's (PG, Fortune 500) Folgers coffee business for $2.95 billion. Smucker will offer a one-time $5 dividend to its shareholders, and Procter & Gamble stock owners will receive 53.5% of Smucker stock in a tax-free stock-for-stock merger.
Hovnanian Enterprises: The New Jersey-based homebuilder posted its seventh straight quarterly loss, one that was 10 times greater than the one posted a year earlier. Stock (HOV, Fortune 500)
Apple: The electronics maker has reached agreement with mobile provider Softbank to offer the iPhone in Japan for the first time, although no introduction date was announced. Stock (AAPL, Fortune 500)
Standard & Poor's: The credit rating firm is working out a settlement with New York Attorney General Andrew Cuomo to change some of the business practices that have been blamed for sparking the subprime disaster, according to the AP. Cuomo has also been scrutinizing Fitch Ratings and Moody's (MCO) in the way they charge fees to bond issuers for their rating services without adequately warning them about investment risks.
Election: The markets will also get the chance to react Sen. Barack Obama's clinching of the Democratic presidential nomination Tuesday night. Obama will face presumptive Republican nominee Sen. John McCain. 
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