Stocks were treading water early Wednesday, a day after the market's continuing obsession with interest rates and the

Federal Reserve

left the major averages near the unchanged mark.

Futures on the

S&P 500

were about half a point above fair value. The Nasdaq 100 was set for a 1-point decline. The 10-year Treasury was losing 2/32 in price and yielding 4.82%, and the dollar strengthened against most major currencies.

Energy futures were easing, but metals strengthened. Crude oil for October delivery, the new benchmark, fell 59 cents to $72.51 a barrel. Gold rose 20 cents to $634.20 an ounce, and silver was gaining 16 cents to $12.60 an ounce.

Major averages in the U.S. closed essentially flat Tuesday after Chicago Fed President Michael Moskow cautioned investors that the central bank might not be done with its rate-tightening campaign.

During a speech, he said "the risk of inflation remaining too high is greater than the risk of growth being too low. Thus some additional firming of policy may yet be necessary to bring inflation back into the comfort zone within a reasonable period of time."

Earlier this month, policymakers left the fed funds target rate unchanged for the first time in more than two years.

Among stocks,


(WY) - Get Report

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said they plan to merge their fine paper businesses in a $3.3 billion deal. Shareholders of Weyerhaeuser will own 55% of the company. Weyerhaeuser will also get a $1.35 billion payment. Domtar's investors will get 45% of the company.



(IBM) - Get Report

said it would buy

Internet Security Systems


for $28 a share, or $1.3 billion. The price gives Internet Security shareholders an 8% premium.

Equities in Europe and Asia were mostly lower. London's FTSE 100 slipped 0.3%, and Frankfurt's Xetra DAX was off 0.2%. Tokyo's Nikkei was falling 0.1%, and Hong Kong's Hang Seng was down 0.4%.

To view Farnoosh Torabi's video take on today's premarket action, click here