The markets were less volatile in trading, calming from Tuesday’s losses to finish mixed on the day.

President Obama announced his Homeowner Stability Initiative, which aims to keep between 7 million and 9 million people from foreclosure. Declining property values started the chain reaction to the current economic situation through the use of derivatives and other financial instruments. Out of the nearly 52 million homeowners with a mortgage, 27% of them owe more than their home is worth. The plan aims to drive down mortgage rates, help homeowners refinance so that their monthly payments are no more than 31% of their adjusted gross income, as well as a host of other measures. The financing for the plan would come from the money already allocated for the TARP.

Morning Outlook

Stocks rose modestly overseas following Wall Street’s mixed results. In Asia, Japan’s Nikkei 225 stock average closed up 23.21 points, or 0.3 %, at 7,557.65, while Hong Kong’s Hang Seng finished 0.1 % higher at 13,023.36.

In Europe, the FTSE 100 index of leading British shares was up 22.47 points, or 0.6 %, at 4,029.30, while Germany’s DAX was 34.88 points, or 0.8 %, higher at 4,239.84. The CAC-40 in France rose 8.91 points, or 0.3 %, to 2,882.98.

Wall Street is feeling pretty optimistic heading into today’s economic news. Could the Dow be looking at a second straight winning session if the numbers impress investors? Dow Jones industrial average futures are up 61, or 0.82 %, to 7,544. Standard & Poor’s 500 index futures gained 8.50, or 1.09 %, to 788.00, while Nasdaq 100 index futures rose 7.75, or 0.66 %, to 1,187.75.

On the Corporate Front

Hewlett-Packard (HPQ) reported a profit drop of 13%; earning $1.85 billion, or 75 cents per share, in the three months that ended Jan. 31. That compares with profit of $2.13 billion, or 80 cents per share, a year ago. Sales rose about 1% to $28.8 billion

Profits at CBS fell 52% in the 4th quarter, while also cutting its quarterly dividend from 27 cents down to 5 cents per share. The company had a net profit in the three months to Dec. 31 of $136 million, or 20 cents per share, compared to a profit of $286 million, or 42 cents per share, in the same quarter a year ago. Revenue fell 6 % to $3.53 billion. Analysts expected earnings of 26 cents per share on revenue of $3.56 billion

CVS Caremark reported a rise in profit of 17% in the 4th quarter; earning $949.3 million, or 65 cents per share, up from $811.2 million, or 55 cents per share, a year ago. Revenue rose 10 %, to $24.14 billion from $21.94 billion.

Economic Calendar

The Federal Reserve on Wednesday cut their forecast for GDP growth in 2009 while raising estimates for unemployment in the economy. Under the new projections, the unemployment rate will rise to between 8.5 and 8.8 % this year. The old forecasts, issued in mid-November, predicted the jobless rate would rise to between 7.1 and 7.6 %. The Fed also believes the economy will contract this year between 0.5 and 1.3 %; which would be the first annual decline since 1991 and the steepest since 1982.

8:30 AM
Producer Price Index: The PPI is a measure of the average price level for a fixed basket of capital and consumer goods received by producers. This is a great indicator of the future CPI as producers will eventually pass the costs onto the consumer. The consensus for the month of January was for an increase of 0.2%, with a 0.1% increase excluding food and energy.

8:30 AM
Jobless Claims: New unemployment claims for the week of February 14th , to show the number of individuals who filed for unemployment insurance for the first time. The fewer people filing for unemployment benefits, the more have jobs, the more income in the consumer’s pocket, as well as a forecast on the strength of the economy. The consensus is for an increase of 620,000 for first time jobless claims. As of last week’s numbers, more people are receiving unemployment insurance then at any point in history. Of course it’s a smaller %age, but the work force is so much larger.

10:00 AM
Leading Indicators: A composite index of ten economic indicators that should lead overall economic activity. The consensus is for no change for the month of January. This follows an increase of 30 basis points in December. The bad news is that the economic situation will get worse before it gets better.