U.S. MARKET AVERAGES

U.S. stocks futures point to a sharply lower market opening on Wednesday on a disappointing quarterly report from Intel Corp., which raised fears of slowing corporate profit growth.

S&P 500 futures were down 6.50 points, below their fair value. Dow Jones industrial average futures were down 56 points, while Nasdaq 100 were down 10 points.

JP Morgan Chase & Co. (JPM: chart), the third-largest U.S. bank, reported that its quarterly earnings rose and its revenue topped Wall Street forecasts. Another upbeat report came from Motorola Inc. (MOT: chart) which posted a third-quarter earnings rise on strong sales of its mobile phones, beating Wall Street estimates.

EBay Inc. (EBAY: chart), the largest Web auctioneer, is among companies scheduled to report results on Wednesday after the closing bell.

Investors may also focus on Cisco Systems Inc ((CSCO: chart),the largest maker of Internet equipment, which said on Wednesday it plans to invest up to $1.1 billion in India over the next three years, marking the company's largest investment outside the United States.

ECONOMIC NEWS

Wednesday morning, the Department of Commerce released its report on housing starts and building permits in the month of September. The report showed that housing starts and building permits both rose unexpectedly.

The report showed that housing starts rose 3.4 percent to a seasonally adjusted annual rate of 2.108 million units in September from a revised 2.038 million unit rate in August. Economists had expected housing starts to fall to a 1.950 million unit rate from the 2.009 million unit rate originally reported for August.

The unexpected increase in housing starts reflected strong growth in the South, where housing starts rose by 6.9 percent. Housing starts rose by 1.9 percent in the Midwest while coming in unchanged in the Northeast and West.

The Commerce Dept. also said that building permits rose 2.4 percent to a seasonally adjusted annual rate of 2.189 million units in September from a 2.138 million unit rate in August. The increase came as a surprise to economists, who had expected building permits to fall to a 2.075 million unit rate.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks dropped across the region, posting heavy losses on renewed inflation worries related to the U.S. economy. Intel Corp was another drag of the market as it released a disappointing revenue forecast. The Nikkei slid for a sixth consecutive session, losing 1.7% on tech shares. South Korea’s Kospi tumbled 2.8%, Hong Kong’s Hang Seng declined 1.6%, and Australia’s All Ordinaries ended down 1.7%.

European markets fell sharply at mid-day trading, reflecting lower close on Wall Street overnight, growing U.S. inflation fears, heavy losses in Asian markets, and a disappointing earnings report from tech giant Intel. The German DAX 30 slipped 1.6%, the French CAC 40 shed 1.4%, and London’s FTSE lost 1.2%.

ENERGY, METALS, CURRENCIES

Oil prices rose ahead of government report on fuel supply and later steadied over $63 a barrel on belief that the upgraded to category 5 Hurricane Wilma will not hit vulnerable oil production facilities in the Mexican Gulf. Light sweet crude December delivery gained 9 cents to $63.29 a barrel. London Brent climbed 13 cents to $59.41.

In European trading gold prices further declined. In London gold dealers fixed a recommended price of $468.40 per troy ounce, down from $472.20. In Hong Kong the precious metal lost $5.10 to close at $473.25. Silver opened at $7.71, down from $7.78.

In European trading the U.S. dollar rose against the euro and the yen, but fell against the pound. The euro was quoted at $1.1947, down from $1.1950. The dollar changed hands at 115.53 yen, down from 115.65. The British pound was trading at $1.7541, up from $1.7492.

EARNINGS NEWS

Yahoo Inc. (YHOO: chart) Internet company, reported Q3 net earnings of 17 cents per share, unchanged from last year’s net earnings in the comparable period on 47% revenue growth, beating analyst estimate of 14 cents a share. Yahoo would have earned 15 cents per share, but the company gained $16 million from the sale of another investment and an unusually low tax rate during the three-month period.

Intel's third-quarter earnings rose 5% from a year ago to $2 billion, or 32 cents a share, on an 18% jump in revenue to $9.96 billion. Two special items complicated the comparison to Wall Street estimates but the top line was about $40 million ahead of forecasts. Intel reported a solid gross margin of 61.1% before charges in the quarter.