Wall Street to fall at the opening

Wall Street was set to open lower Wednesday as the dollar plumbed record depths against the euro while oil and gold hit record highs.

The dueling trends are worrisome news for an economy that faces the threat of inflation and an economic slowdown, or stagflation. Investors were eager to hear comments from Federal Reserve Chairman Ben Bernanke, who was scheduled to speak with lawmakers Wednesday.

Investors want some indication as to whether the Fed is more concerned about the sagging economy or the risk of inflation.

A growing list of economic reports suggest stagflation is becoming a serious threat, and the Fed may have to choose whether to keep cutting rates to stimulate the economy, or halt rate reductions to cool off inflation.

The euro hovered above $1.50 Wednesday and analysts cite the growing belief that the U.S. is indeed beset by both inflation and slowing growth.

The weak dollar helped propel commodities to new highs overnight. Oil prices broke through a new intraday high of $102 a barrel in Singapore Wednesday. In London trade gold futures set a new high in electronic trading of $961.30 an ounce.

The futures contract for the Dow Jones industrial average fell 14 points, or 0.1 percent, to 12,685. Futures contracts for the Standard & Poor's 500 dropped 3.20, or 0.2 percent, to 1,379.60 as the Nasdaq 100 futures gave up 4 points, or 0.3 percent, to 1,792.

Wall Street rallied Tuesday after IBM approved a $15 billion stock buyback, suggesting to investors that there are still some companies out there with financial muscle. The Dow Jones industrial average rose more than 110 points. Broader indexes rallied too.

Treasurys rose in early trade, pushing yields down. The yield on the benchmark 10-year note fell to 3.83 percent from 3.86 percent last Tuesday. Oil futures were off their overnight highs, but still trading higher, last trading up 23 cents to $101.11 a barrel in pre-open trading on the New York Mercantile Exchange.

Luxury homebuilder Toll Brothers on Wednesday reported a first-quarter of $96 million while Nortel Networks announced a hefty $844 million quarterly loss. Nortel said it will cut 2,100 jobs.

Investors are awaiting the release Wednesday of reports on durable goods orders and new home sales. According to surveys of analysts by Thomson/IFR, orders for durable goods should have fallen 1.7 percent in January after rising 5.2 percent in December. However, excluding transportation orders, last month's decline is expected to be just 0.6 percent.

New home sales are expected to have continued to dwindle at the start of the year. Thomson/IFR forecasts that just 600,000 new homes were sold last month, down from 604,000 in December.

In Tokyo, the Nikkei closed 1.49 percent higher. But there were losses on European bourses, as London's FTSE 100 fell 0.65 percent, Paris' CAC 40 gave up 0.60 percent and Frankfurt's DAX lost 0.29 percent.