9:00AM U.S. stock futures dropped, reflecting plunge in Chinese market.

U.S. stock futures moved sharply lower on Wednesday, reflecting a plunge in Chinese stocks and cautiousness ahead of the Fed Reserve's release of minutes from its latest meeting. The main Shanghai Composite Index dropped 6.5% after Beijing tripled a tax on stock trading. FOMC minutes are expected to indicate a rate cut by the end of the year rather than a rate hike.

In corporate news, International Business Machines (IBM: chart) said it repurchased $12.5 billion of common stock through accelerated share-buyback agreements. IBM said it bought 118.8 million, or 8%, of its shares for an initial price of $105.18 each, under its $15 billion buyback authorization. IBM also said it expects 2007 earnings per share to increase 13% to 14%, up from its previous estimate of 11%. The stock fell 0.5% in pre-market trading. Among other pre-market highlights, Pulte Homes (PHM: chart) said late Tuesday it will cut about 16% of its work force, or about 1,900 jobs.

Coca-Cola (KO: chart) was upgraded to buy from hold at Citigroup. The broker lifted its price target by $9 to $59. In deal news, technology accessory distributor CDW Corp. (CDWC: chart)agreed be bought by a private equity company for $7.3 billion. eSpeed Inc., a publicly owned electronic trading house, said it is buying BGC Partners in a $1.3 billion deal. Dow Jones industrial futures expiring in June fell 63, or 0.47%, to 13,495. Standard & Poor's 500 index futures fell 7.70, or 0.51%, to 1,514.80. Nasdaq 100 index futures dropped 11.25, or 0.59%, to 1,895.25.


8:15AM CDW announced after the Bell Tuesday that it agreed to be bought by Madison Dearborn Partners for $7.3 B.

CDW (CDWC: chart) announced after the closing bell on Tuesday that it agreed to be acquired by private-equity firm Madison Dearborn Partners in a cash deal worth $7.3 billion. Under terms of the deal, Madison Dearborn will pay $87.75 a share for the technology products reseller. The transaction is 16.1% premium over CDW''s May 25 closing price of $75.56 a share. Morgan Stanley will represent CDW and will solicit other proposals during the next 30 days. Reports that CDW was in talks with Madison Dearborn sent CDW''s shares up 10% to their Tuesday close of $83.11. The stock traded up 3.35 in pre-opening hours.


7:30AM NY-6:30PM Mumbai Sensex ends lower on late-hour drop in IT stocks.

The Sensex on BSE finished Wednesday 96.83 points, or 0.67%, lower at 14,411.38.

The market-breadth was negative as there were three decliners for every two advancers. As there were 991 stocks which advanced, 1,594 stocks declined and 67 stocks remained unchanged. Of the 30 stocks in the Sensex, only seven advanced, while the rest declined. The turnover on BSE was Rs 4,737 crore, compared with Rs 4,605.18 crore on Tuesday. On NSE, the turnover was Rs 11,123.09 crore, much higher than Rs 9,340.58 crore on Tuesday.

Economic news

India is the third emerging stock market after China and Russia to go beyond $1 trillion in value, supported by the fastest economic growth in 60 years, a strong rupee and overseas investment. Indian economic growth has averaged 8.6% for the past four years aiding earnings growth of as much as 35% for the year ended March 31. Overseas funds are also helping the stock market after buying a net $3.76 billion of equities this year.

The rupee ended yesterday at its highest level in nine years on speculation that the size of capital inflows will offset the Reserve Bank of India’s efforts to curb the surge of the rupee.

India will buy only 300,000 tonnes of wheat on account of high prices quoted in a tender floated last month for one million tonnes, a senior government official said yesterday.

Trading highlights

New issue MIC Electronics was the most active stock with a turnover of Rs 492.60 crore followed by Larsen & Toubro and Orbit Corp. MIC Electronics ended at Rs 335.65 on BSE, a nearly 124% over its IPO price of Rs 150 per share.

Advancers

Larsen & Toubro rallied over 7% to Rs 1,994. L&T hit a record high of Rs 2,009, in intra-day trade. It posted 50% increase in net profit to Rs 701 crore in fourth-quarter of fiscal 2007 from Rs 467 crore in the comparable period a year earlier. Sales advanced 35.01% to Rs 6,248.24 crore against Rs 4,627.87 crore in previous period.

Hero Honda surged 1.7% to Rs 697, and HDFC spurted over 1% to Rs 1,833. Bajaj Auto settled 0.4% higher at Rs 2,201, while Gujarat Ambuja added 0.3% to Rs 115.