U.S. MARKET AVERAGES

U.S. stock futures were sitting near the unchanged mark, predicting a flat opening with investors cautious before a report expected to show a rise in U.S. inflation last month, which could lead to further interest-rate increases. Consumer price index news for January is expected to show a 0.5% increase from the previous month, while CPI, excluding food and energy, is expected to show a 0.2% rise.

On Tuesday markets moved to the downside after a strong reading for the leading indicators index and minutes from the latest FOMC meeting raised inflation concerns. The Nasdaq was the worst performer among the broader indices, with a loss of more than 19 points, or 0.8%.

Among the companies expected to release earnings Wednesday are wireless service Sprint Nextel, casino operator Harrah''s Entertainment Inc. and media company Viacom Inc.

S&P 500 futures were up 0.3 point, slightly above fair value. Dow Jones industrial average futures rose 2 points, and Nasdaq 100 futures were down 1.5 points.

ECONOMIC NEWS

The Department of Labor released its report on consumer prices in the month of January on Wednesday, showing that prices rose more than economists had expected due largely to a rebound by energy prices.

The Labor Dept. said that its consumer prices index rose 0.7 percent in January after an unrevised 0.1 percent decrease in December. Economists had been expecting a somewhat more modest increase of about 0.5 percent.

As mentioned above, the price growth in January reflected a rebound in energy prices, which rose 5.0 percent in January after falling 2.1 percent in December and 8.1 percent in November. Prices for transportation also showed a notable increase, rising 1.8 percent.

The report also showed that core prices, which exclude food and energy prices, rose 0.2 percent in January after a downwardly revised increase of 0.1 percent in December. The growth in core prices came in line with economist estimates.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks lost ground Wednesday to close broadly down, hurt by weakness on Wall Street and climbing oil prices. The Nikkei reversed from yesterday’s sharp rise of 3% to finish lower 0.7%. Across the region, Taiwan’s Weighted index tumbled 1.5%, South Korea’s Kospi lost 0.4%, while Australia’s All Ordinaries and the Bombay Stock Exchange’s Sensitive index slightly advanced.

European stocks retreated at mid-day dealings, reflecting a weak close of U.S. markets hit by rising crude oil and disappointing outlook from Wal-Mart. Well-received corporate data from brewers like Heineken and miners like Anglo American failed to lift sentiment. The German DAX 30 lost 0.1%, the French CAC 40 traded lower at 4,990, and London’s FTSE 100 edged down 0.1%.

OIL, METALS, CURRENCIES

Crude oil prices eased back after recent sharp gains, following the violent militant act against oil pipelines in the Niger Delta. Light sweet crude April delivery declined 51 cents to $62.23 a barrel. London Brent for April delivery dropped 37 cents to $61.23 a barrel.

European gold further weakened. In London gold traded at the fixed price of $551.75 bid per troy ounce, down from $554.40. In Zurich the precious metal traded at $551.60, down from $554.60. In Hong Kong gold gained 60 cents to close at $553.70. Silver rose to $9.59 from $9.51.

The U.S. dollar advanced against other major currencies. The euro traded at $1.1873 down from $1.1977. The dollar bought 118.77, up from 118.70. The British pound stood at $1.7400, down from $1.7460.

EARNINGS NEWS

Orbital Sciences Corp, (ORB: chart), manufacturer of rockets for military and civil space projects, reported Q4 net income of $7.6 million, or 12 cents a share, down from $166.1 million in the year-ago period. The company attributed the sharp drop to a change in income tax expense and. Revenue for Q4 advanced 13.9%.

Big Lots, (BLI: chart), retailer, reported Q4 net earnings 13 cents share, down from 51 cents in the year-ago period despite 6% sales growth. On a continuing operations basis, the company reported 33 cents a share, down from 50 cents, missing on that basis analyst estimate of 43 cents a share. Revenue reached $1.39 billion and same-store sales were up 2.5%.