U.S. MARKET AVERAGES

U.S. stock futures declined Wednesday, predicting a lower start after web search company Google reported disappointing quarterly results which sent the whole tech sector in the negative. On Tuesday the three market averages finished weak, following the Fed Reserve’s decision to raise interest rate.

The central bank's Federal Open Market Committee raised the fed funds rate by a quarter percentage point to 4.5% from 4.25% which was the Fed's 14th consecutive rate increase since the beginning of interst-rate hikes on June 30, 2004.

Earnings reports drew back the attention of investors. Google's disappointing Q4 performance raised concerns among investors and in particular, those investing in Internet companies.

Google (GOOG: chart) tumbled 16%, citing a higher-than-expected tax rate as the reason why its profit missed the consensus forecast. UBS lowered its rating on Google to neutral from buy.

Among major companies releasing strong quarterly results were Time Warner Inc. (TWX: chart), posting a higher fourth-quarter profit above analysts' forecasts, power company Duke Energy Corp. (DUK: chart) which posted a 69% income growth in fourth-quarter. Media group Tribune Corp (TRB: chart) announced 38% net income drop in Q4 on 4.5% revenue decline, missing estimates.

Standard & Poor's 500 index futures were down 4.30 points, below fair value. Nasdaq 100 index futures were down 18.50 points, and Dow Jones industrial average futures were down 10 points.

On the economic front, a reading on manufacturing, the ISM index, is expected to show a decline to 55.4 in January from 55.6 in the prior month. The report is due at 10 a.m.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks ended mostly lower on volatile trade, reflecting heavy corporate news release and growing uncertainty over the direction of U.S. interest rates. A 13% drop of Google’s shares overnight also weighed on sentiment. The Nikkei ended its winning streak, falling 1% for the first time after six strong sessions. South Korea’s Kospi extended losses to drop 1.7%, Hong Kong’s Hang Seng fell 0.3%, while Singapore Straits Times gained 0.8%.

European stocks gained ground Wednesday, lifted by solid sales growth for Roche Holding and bid speculations involving Lloyds TSB. Inspired by the positive news, stock markets ignored Wall Street weakness and the disappointing report from Google. The German DAX 30 added 0.1%, the French CACV 40 gained 0.4%, and London’s FTSE 100 rose 0.5%.

OIL, METALS, CURRENCIES

Crude oil prices slightly declined on OPEC’s decision to keep production levels. The slide was limited by concerns over Iran’s standoff with the West. Light sweet crude for March delivery fell 12 cents to $67.80 a barrel. Heating oil lost 1 cent to $1.8406 a gallon, while gasoline inched down to $1.7970. Natural gas gained 17 cents to $9.487 per 1,000 cubic feet. London Brent lost 2 cents to $65.97.

European gold prices declined on strengthening dollar. In London gold traded at the fixed price of $567.20 bid per troy ounce, down from $569. In Zurich the precious metal traded at $567.60, down from $569.80. In Hong Kong gold rose $7.45 to close at $567.05. Silver opened at $9.76, down from $9.82.

The U.S. dollar grew stronger against other major currencies. The euro was quoted at $1.2110, down from $1.2160. The dollar bought 117.68 yen, up from 117.23. The British pound stood at $1.7757, down from $1.7805.

EARNINGS NEWS

Boeing Co, (BA: chart), aircraft manufacturer, reported Q4 net income of 58 cents a share, more than double from 23 cents a share in the same period a year ago. Total revenue advanced more than 6%. Analysts forecast earningsof 44 cents a share before items. Boeing announced 2006 revenue would be about $60 billion, below previous estimates as a result of a previously disclosed accounting change in its commercial airplane business.

Pinnacle West Capital Corp, (PNW: chart), electricity provider, reported Q4 earnings of 22 cents a share, down from a year-earlier profit of 37 cents a share, topping analyst estimate of 15 cents a share. Revenue fell in Q4 to $691.7 million from $713.3 million in the same period a year ago. On a continuing operations basis, the company earned 24 cents a share in Q4.

Unitrin Inc, (UTR: chart), insurance company, reported Q4 earnings of $1.26 a share, up from $1.07 a share in the year-ago period. Revenue dropped to $755.9 million from last year's $759.7 million The results include a tax benefit of $14 million, a favorable loss adjustment reserve development of $13.9 million and $4.2 million in higher catastrophe losses.

JetBlue Airways Corp, (JBLU: chart), airline company, reported a Q4 net loss of 25 cents a share, down from a profit of 1 cent a share in the year earlier period on record-high fuel prices and a tough revenue environment, compounded by the impact of two hurricanes, missing analyst forecasts of a net loss of 16 cents a share. If not for two unusual items, the company said net loss would have been 19 cents a share in Q4.