NEW YORK (CNNMoney) -- Investors better buckle up. U.S. stocks are headed for a sell-off at Wednesday's open, after Italy's key bond rate rose above 7%, sparking worry that Italy may be forced to seek a bailout.
Dow Jones industrial average (), S&P 500 ( ) and Nasdaq ( ) futures fell about 2%. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.
Early Wednesday, Italy's 10-year bond yield spiked above 7% -- the level at which other European countries have had to seek bailout packages.
The surge came after London clearing house LCH Clearnet raised margins on the amount of collateral traders had to put up to hold Italian bonds. "When this happened to Greece, Ireland and Portugal, a bailout was waiting in the wings," said Kathleen Brooks, research director at Forex.com in London.
Just a day earlier, Prime Minister Silvio Berlusconi agreed to resign after Parliament approves that country's budget, which could come as late as the first week of December.
While his pending resignation allows investors to scratch off one item on Europe's long list of worrisome questions, it also raises new questions about the country's future.
Many investors are realizing that this change in leadership isn't going to provide a quick fix to the nation's ongoing debt crisis, said Sebastian Galy, a senior currency strategist at Societe Generale.
"The bearish consensus knows a change of personnel won't make foreign investors any less reluctant to buy Italian government bonds, and won't make getting Italy's economy to grow faster any less difficult," Galy said.
Bank stocks were among the big gainers in the prior session, with Citigroup (Fortune 500), Goldman Sachs ( , Fortune 500) and JPMorgan Chase ( , Fortune 500) rising more than 2%. Bank of America ( , Fortune 500) shares also rose.,
The banks continued their sell-off Wednesday, all dropping more than 3% in premarket trading.
Companies: General Motors ( , Fortune 500) posted lower third-quarter earnings of $1.7 billion. CEO Dan Akerson said in the earnings release that the solid performance in the quarter "isn't good enough." Shares of GM slid 6% in premarket trading.
Shares of Macy's (Fortune 500) fell 4%, after the retailer reported earnings results ahead of the market open that missed expectations.,
Dean Foods (Fortune 500) posted a smaller-than-expected loss for the third quarter and raised its full-year outlook -- sending shares of the company more than 3% higher in premarket trading.,
Cisco Systems (Fortune 500) is scheduled to report earnings after the market close.,
Economy: A reports on inventories will be released later Wednesday.
Analysts surveyed by Briefing.com expect wholesale inventories to have increased by 0.5% for the month of September, after increasing 0.4% in the month prior.
World markets: European stocks sank in morning trading. Britain's FTSE 100 ( ) dropped 2%, the DAX ( ) in Germany tumbled 2.8% and France's CAC 40 ( ) shed 1.9%.
Asian markets ended higher. The Shanghai Composite () ticked up 0.8%, the Hang Seng ( ) in Hong Kong jumped 1.7% and Japan's Nikkei ( ) climbed 1.2%.
The Chinese government said its inflation rate cooled for a third straight month in October to 5.5%, compared to 6.1% rate in September.
Oil for December delivery slipped $1.71 to $95.09 a barrel.
Gold futures for December delivery fell $5.10 to $1,794.10 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 1.99% from 2.06% late Tuesday.
|What we want Apple to unveil at WWDC|
|Millennials squeezed out of buying a home|
|7 traits the rich have in common|
|Big Data knows you're sick, tired and depressed|
|Your car is a giant computer - and it can be hacked|
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.23%||4.25%|
|15 yr fixed||3.23%||3.21%|
|30 yr refi||4.14%||4.14%|
|15 yr refi||3.16%||3.13%|
Today's featured rates: