[R]9:45AM U.S. stocks opened in the negative on rate concerns.[/R]

Wall Street saw a weak opening Tuesday amid concerns that rate cuts are not likely in the near term after the Fed Reserve Chairman Bernanke said inflation risks remain to the upside.

The Nasdaq was weighed down by 5.7% drop in the shares of Bed Bath & Beyond (BBBY: chart) after the home goods retailer warned that its Q1 profit will miss forecasts. Goldman Sachs downgraded the stock to neutral from buy. Among blue-chip stocks, Dupont (DD: chart) was the biggest decliner, falling 2.2%, followed by Home Depot Inc. (HD: chart), down 1.1%, and Alcoa (AA: chart), losing 0.6%. Dupont was downgraded by Lehman Bros to equal from overweight.

Telecoms were led by Avaya Inc. (AV: chart) which gained 2.2% after the company agreed to a $8.2 billion buyout from two private-equity firms. Among other stocks in the sector, Ciena Corp. (CIEN: chart) dropped 5%, while Sprint Nextel Corp. (S: chart) lost 0.9%. Some software stocks posted notable losses. Communications software developer Openwave Systems (OPWV: chart) slipped 15.9% after the company rejected an offer to purchase 49% of its outstanding shares.

In other corporate news, Amgen (AMGN: chart) agreed to buy privately held Ilypsa for $420 million. Ericsson (ERIC: chart) agreed to buy German billing software firm LHS for $420 million, too. Shares of Amgen and Ericsson advanced 1% each. The Dow Jones industrial average was down 61.52 points, or 0.45%, at 13,614.80. The Standard & Poor''s 500 Index was down 6.33 points, or 0.41%, at 1,532.85. The Nasdaq Composite was down 9.53 points, or 0.36% at 2,608.76.


[R]9:30AM London trades slightly higher Tuesday on strong earnings results.[/R]

In late morning session, the FTSE 100 gained 21 points, 0.33%, at 6,686.2

[Advancers

United Utilities led the advancers, as strong annual results and news it intended to sell its electricity distribution assets boosted the stock. The company added it expected to return to shareholders the net equity proceeds from the sale. Shares of United Utilities were up 3.4%.

In broker news, Standard Life advanced 3.5% and Old Mutual rose 1.5% after Merrill Lynch upgraded both life insurance stocks from neutral to buy.

Mid-cap company Carphone Warehouse surged 6% after annual same-store retail revenue advanced 6.6%. The mobile retailer added its guidance for the group remained positive.

Decliners

On the downside, Daily Mail & General Trust dipped 2% after Morgan Stanley downgraded the media group from overweight to equal-weight.

Intermediate Capital Group plunged 11% as it reported a record pre-tax profit but added it anticipated prices and structures, powered by excess liquidity in debt markets, to worsen before they got better.

Plastics specialist Victrex is also under pressure, its shares down 5.4%, after it flagged a softening in demand from semiconductor manufacturers alongside record profits.


[R]9:00AM U.S. stock futures pointed lower ahead of economic data.[/R]

U.S. stock futures were indicating a lower opening Tuesday, with the market awaiting data on the nation''s service sector. The ISM index on non-manufacturing industries in May is expected to hold steady at 56%. In addition, the Fed Reserve''s Chairman Bernanke said in a speech that U.S. inflation risks are on the upside, giving investors little incentive to buy.

Profit warnings in the retail sector also weighed on the sentiment. Bed Bath & Beyond (BBBY: chart) dropped 6% in pre-market opening amid profit warning. Goldman Sachs downgraded its stock to neutral from buy. Cache (CACH: chart) said that its Q2 earnings would miss an earlier forecast due to a 2% decline in same-store sales in May. Again in the sector, Moody''s (MCO: chart) lifted its earnings outlook on an improved view of structured finance, but the stock lost 1% in pre-open trade.