UK leisure group Whitbread gained 5.5% on speculation that US property investor Starwood Capital Group is ready to launch an offer for the company.

AstraZeneca gained 2.5% as Morgan Stanley upped the company on Tuesday from equal-weight to overweight.

Decliners of the Day

HSBC, the largest bank by market value in Europe, dipped 1%, while HBOS, the biggest mortgage bank in the U.K., declined also 1%.

Oil stocks also declined after Goldman Sachs reduced its rating on several of the large-caps in the sector. Royal Dutch Shell shed 1.5% after a downgrade from neutral to sell while BP, which was cut from buy to neutral, lost 0.8%.

Property stocks were also hit as Hammerson lost 1.7% and Liberty International was lower by 1.5%. Land Securities Group declined 1.7%.


9:00AM U.S. stock futures pointed lower amid continued subprime worries.

U.S. stock futures were indicating a lower market opening Wednesday, hurt by continued subprime loans concerns. The economic jitters were sparked yesterday by a wave of profit warnings from Home Depot (HD: chart) and Sears Holdings (SHLD: chart) along with a threat from S&P that it could downgrade credit ratings on $12 billion worth of subprime securities.

Investors were also awaiting Q2 earnings releases. Biotech company Genentech (DNA: chart) and Pizza Hut owner Yum Brands (YUM: chart) are due to report quarterly results after the closing bell. In deal news, Steelmaker Gerdau Ameristeel (GNA: chart) announced late Tuesday that it agreed to acquire Chaparral Steel Co. (CHA: chart) in a deal worth $4.22 billion, or $86 per share.

There are no major economic data scheduled to be released Wednesday. Dow futures expiring in September fell 29.00, or 0.21%, to 13,556.00. The Standard & Poor's 500 futures fell 4.00, or 0.26%, to 1,516.00, and the Nasdaq 100 futures fell 9.00, or 0.45%, to 1,9838.00. In early trading Wednesday, the 10-year Treasury note's yield slipped to 5.00% from 5.03% late Tuesday.


8:30AM Asia declines with Japanese stocks lower on concern over U.S. housing market, while China rises on properties.

In Tokyo, the market fell as investors preferred the safety of government bonds, worried by a possible slowing in the U.S. economy growth in the light of the problems U.S. housing market is experiencing. Japan's 10-year bonds advanced the most since September. The benchmark Nikkei 225 Average Index ended 1.1% lower at 18,050. The strengthening of the yen against the dollars affected the exporters as well. Auto maker led the decliners, with Toyota shedding 1.7% and Honda sinking 1.3%.

In Hong Kong, the market broke its six-day winning streak and declined. The Hang Seng Index lost 1.2% to end at 22,607. Large-caps China Mobile and HSBC led the declines. HSBC shed 1.5% on worries about the exposure of the bank to worsening problems in the U.S. subprime mortgage market. China Mobile slipped 0.7%.

Seoul also finished lower. The Kospi Index lost 0.2% to 1,890 as strong utility stocks could not erased losses in banks and brokerage stocks. The latter finished sharply lower as news that the government intends to lower sales commission fees of equity mutual funds in the near future. Samsung Securities declined 2.1% and Korea Exchange Bank fell 1.4%. Utility stocks outperformed the other shares on the market and gained as investors thought they were underestimated earlier. Korea Electric Power gained 2.1% and Korea Gas rose 2.4%.

In China, the Shanghai Composite Index rallied 0.3% to end at 3,866, bucking as usual the overall trend with the other major indexes. Expectations rode high with investors that the strong yan would boost property stocks. China Vanke''s Class A shares ended 3.3% higher, Financial Street Holding gained 1.8% and China Enterprise surged 3.9%.

Sydney lost as declining base metals prices hurt mining stocks. The benchmark S&P/ASX 200 shed 0.6% to 6,325 with miners BHP Billiton dropping 1.7%, while Rio Tinto dipped 0.7% and nickel and zinc mining stocks also declined on weakness in those two metals.


8:00AM Gerdau Ameristeel agreed to buy Chaparral Steel for $4.22 billion.