09:00AM U.S. stock futures indicated a lower opening, despite benign inflation data.

U.S. stock futures were indicating steeply lower opening on Wednesday, as growing concerns about the strength of the credit market offset upbeat economic data. The Commerce Department said that U.S. consumer prices rose only 0.1% in July on falling gasoline prices, marking the slowest inflation rate in eight month. The core consumer price index increased 0.2% for the second straight month.

In corporate news, Bank of America (BAC: chart) and Countrywide Financial (CFC: chart) refused to lend money when hedge funds use mortgages, collateralized debt obligations and subprime securities as collateral. Countrywide Financial slipped 7% in the pre-open after it was downgraded to sell from buy at Merrill Lynch. The broker cited concerns about liquidity in the mortgage sector.

On the earnings news front, Applied Materials (AMAT: chart) dropped 4% in pre-open trade after the low end of the chip equipment maker's quarterly earning missed estimates. European food makers advanced after Nestle (NSRGY: chart) posted an 18% profit rise, raised its earnings forecast and announced a $21 billion stock buyback.

S&P 500 futures fell 8.5 points at 1,425.80 and Nasdaq 100 futures dropped 13.75 points at 1,901.00. Futures on the Dow Jones Industrial Average dropped 74 points.