US futures head lower ahead of Bernanke testimony

NEW YORK (AP) -- U.S. stock futures fell Wednesday ahead of a second day of testimony from Fed Chairman Ben Bernanke on Capitol Hill as the global slowdown manifested itself in a number of quarterly earnings reports from corporations.

Dow Jones industrial average futures gave up 41 points to 12,696. Standard & Poor's 500 futures fell 5.1 points to 1,353.10 and Nasdaq futures declined 9.5 points to 2,577.50.

Bank of America's earnings topped most Wall Street expectations for the second quarter although revenue fell short. Profits declined for both PNC Financial Services Group and investment manager BlackRock.

Except for Bank of America, financial stocks mostly fell in premarket trading.

After the market closed Tuesday, Intel said a slowing global economy cut into its second quarter and warned that revenue this quarter will likely fall short of expectations. Investors will be keying in on second-quarter earnings from IBM after the market closes Wednesday. IBM is the world's largest technology-services company and how well it does provides a gauge of the global business appetite for technology spending.

American Airlines, which filed for bankruptcy protection in November, reported Wednesday that it is still losing money.

AMR's second-quarter loss narrowed to $241 million mostly because of $230 million in costs tied to its bankruptcy restructuring. A year ago, it lost $286 million.

A deteriorating business climate is palpable in China, where some of the country's biggest corporations are warning of profit declines nearing 80 percent.

On Wednesday, Air China Ltd., one of three huge, government-owned airlines, warned that profit for the first half of the year will fall by at least half from a year earlier. State-owned ZTE Corp., one of the world's biggest producers of telecommunications equipment, is projecting a decline of up to 80 percent.

After warning that a recovery was not yet stable over the weekend, Chinese Premier Wen Jiabao said Tuesday that the employment outlook "will become more complex and severe."

There are pockets where it appears a rebound is underway, particularly in the U.S. real estate market.

Homebuilders broke ground on the most new homes and apartments in nearly four years last month, the Commerce Department reported Wednesday.

Housing starts rose 6.9 percent in June to a seasonally adjusted annual rate of 760,000. That's the highest since October 2008. Construction of apartments also rose after falling in May. But the number of permits to build homes fell 3.7 percent to 755,000, down from May's three-and-a-half-year high. Permits for apartments fell as well, while permits for single-family homes edged up to the highest level since March 2010.

Despite the gains, the level of housing starts and permits are roughly half what economists consider healthy.

Shares in some of the nation's largest homebuilders rose in premarket trading.

In addition to IBM, eBay, American Express and Yum Brands, owner of Taco Bell, KFC and Pizza Hut report earnings later Wednesday.