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Stock Futures Pause as Rally Momentum Fades

NEW YORK ( TheStreet) -- U.S. stock futures signaled a mixed open after a strong rally in the prior session as the majority of large domestic banks passed an annual stress test.

Futures for the Dow Jones Industrial Average were up 4 points, or 4 points above fair value, at 13,117, after closing at its highest level since December 2007 on Tuesday. Futures for the S&P 500 were down a fraction of a point, or 0.1 point below fair value, at 1390. Futures for the Nasdaq were down 3 points, or 2 points below fair value, at 2691, after the index closed above the 3000 milestone for the first time since the year 2000

Stocks were headed for a breather after rallying to key levels on Tuesday. The Dow closed up more than 200 points, with gains increasing toward the close after JPMorgan Chase (JPM - Get Report) surprised the market and sent bank stocks soaring by announcing an increase in its dividend and a stock buyback.

In an earlier statement, the Federal Reserve held back on introducing new monetary stimulus, saying that the economy has seen modest growth. The bank also said that 15 of the 19 largest banks in the U.S. could maintain adequate capital levels even if a recession occurred.

Before the bell, the Commerce Department reported that higher fuel prices helped push to February import prices by 0.4% after prices stayed unchanged in the previous month. Import prices were expected to gain 0.6%, according to Thomson Reuters. Export prices rose 0.4%, more than the expected 0.2% gain, after a 0.2% rise the month prior.

Federal Reserve Chairman Ben Bernanke speaks at 9 a.m. Fears that oil prices will push up inflation could be a major barrier to the Fed taking further action, so investors will be listening in on Bernanke's description of inflation and the economic outlook.

Germany's DAX was up 1.46% while London's FTSE was up 0.52%. The Hong Kong Hang Seng closed down 0.15% while the Nikkei Average in Japan gained 1.53% overnight.

In corporate news, a number of banks issued stock buyback announcements after the results of the stress tests were released. Discover Financial Services (DFS) announced that its board had approved a $2 billion share repurchase program.

Meanwhile Regions Financial (RF) announced that it had begun a public offering of about $900 million of common stock as part of its plan to buy back $3.5 billion of series A preferred stock issued to the U.S. Treasury Department under the Troubled Asset Relief Program. Financial stocks were mixed in premarket trading. Regions Financial shares were gaining 4.7% to $6.05; Citigroup shares were falling 3.8% to $35.07; and Metlife shares were sliding 3.5% to $38.10.

JPMorgan Chase (JPM - Get Report) passed the Fed's stress test, announced a 5-cent increase in its quarterly dividend to 30 cents a share, and said its board authorized a new $15 billion buyback program. Shares were down 0.1% to $43.33 after popping in the previous session and afterhours trading.

Chesapeake Energy (CHK) and partners M3 Midstream and EV Energy Partners (EVEP) plan to build a $900 million pipeline system in eastern Ohio that will process and transport natural gas from the Utica shale. Chesapeake shares were down 0.3% to $24.62.

Specialty retailer Pacific Sunwear (PSUN) posted a fourth-quarter loss of 19 cents share on sales of $234.2 million, compared with the loss of 22 cents a share on sales of $245.4 million that analysts were expecting.

April oil futures were down 21 cents to $106.50. In other commodities, April gold futures were down $34.50 to $1659.70 an ounce.

The dollar index was 0.12% higher. The benchmark 10-year Treasury was down 22/32 pushing the yield to 2.206%.

-- Written by Chao Deng in New York.

>To contact the writer of this article, click here: Chao Deng.

>To follow the writer on Twitter, go to: @chao_deng

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