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A round of worrying headlines from Europe knocked foreign markets and U.S. stock-index futures modestly into negative territory.
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As of 9:00 a.m. ET, Dow Jones Industrial Average futures fell 26 points to 12364, S&P 500 futures slipped 3.3 points to 1283 and Nasdaq 100 futures dipped 3.5 points to 2360.
There are few U.S. economic reports on tap for Wednesday morning, meaning traders are paying close attention to developments from Europe.
Germany's economy, Europe's biggest, expanded at a pace of 3% last year, slower than the 3.7% pace it grew at the year prior, according to preliminary data from Federal Statistics Office. The country's economy also contracted by a quarter percent in the final quarter of 2011 as it struggled to counteract headwinds caused by the euro zone's debt crisis.
Indeed, the report "doesn't bode well" for the currency bloc's overall economy because Germany is such an important economic player there, Manoj Ladwa, a senior trader at ETX Capital told FOX Business in an interview.
Fitch Ratings also warned that if Italy is unable to make it through its debt crisis it could cause a "cataclysmic" break-down of the euro, Reuters reported, citing David Riley, the company's head of sovereign ratings. The ratings company also urged the European Central Bank to boost its purchases of beleaguered European sovereign debt, according to the report, a move that analysts say could help push borrowing costs down for countries like Italy and Spain on private credit markets.
In European bond markets, Germany held a successful auction of five-year paper a day ahead of offers by Italy and Spain. Italy's 10-year note is still yielding slightly more than 7%, lower than the prior day, but a level that could make it difficult to the country to cut its deficit and refinance its debt this year.
The euro dipped 0.59% to $1.2703, while the U.S. dollar rose 0.42% against a basket of six world currencies. European blue chips were down 0.77%.
On the U.S. front, the Federal Reserve is set to release its Beige Book, an anecdotal analysis of economic conditions in its districts on Tuesday afternoon. Analysts who follow the Fed are paying particularly close attention to this release since the central bank recently said it would begin publishing interest-rate forecasts.
Energy futures were in the red ahead of the weekly inventory report from the Energy Department. Analysts expect oil inventories to have climbed by 1.1 million barrels last week.
The benchmark crude oil contract traded in New York fell 37 cents, or 0.34%, to $101.89 a barrel. Wholesale RBOB gasoline slipped 0.03% to $2.772.
In metals, gold rose $4.50, 0.28%, to $1,636 a troy ounce.
European blue chips were down 0.77%, the English FTSE 100 slid 0.75% to 5,654 and the German DAX fell 0.7% to 6,120.
In Asia, the Japanese Nikkei 225 climbed 0.3% to 8,448 and the Chinese Hang Seng rose 0.78% to 19,152.