In Europe, shares fell sharply and the euro hit a two-week low as opposition within the euro zone to budget austerity measures unnerved investors already worried about a weak global growth outlook.

Contract manufacturer Jabil Circuit (JBL.N) missed quarterly profit expectations and forecast weak first-quarter results as it continues to grapple with low demand in some business segments.

Yahoo (YHOO.O) chief executive Marissa Mayer laid out broad goals for the Internet group on Tuesday in her first companywide address.

A U.S. judge has certified a class action lawsuit against Costco Wholesale (COST.O) over allegations of gender discrimination in its promotion practices.

General Electric (GE.N) sold about a quarter of its stake in Bank of Ayudhya BAY.BK under a plan to shed non-core assets, after the value of its five-year investment in Thailand's most profitable bank more than doubled.

An elections court in Brazil has ordered the arrest of Google's (GOOG.O) most senior executive in the country after the company failed to take down YouTube videos attacking a local mayoral candidate.

International Business Machines (IBM.N) will announce on Wednesday it is to ramp up efforts to sell cloud-computing services to mid-size businesses, the Wall Street Journal reported.

Barnes & Noble (BKS.N) took a shot at Amazon.com (AMZN.O) on Wednesday, unveiling its own lighter and thinner hi-definition tablets which can accommodate multiple users in a bid to win a bigger share of a growing market.

Short interest on the New York Stock Exchange rose 2.26 percent in the first half of September. As of September 14, short interest rose to about 14.02 billion shares compared with 13.71 billion shares as of August 31.

On the economic front, investors will keep an eye on new home sales for August, due at 1400 GMT, as well as on a speech by Federal Reserve Bank of Chicago President Charles Evans before the Lake Shore Chamber of Commerce 8th Annual Business Expo, at around 1715 GMT.

The S&P 500 suffered its worst day since June on Tuesday, pulled lower by Caterpillar (CAT.N) which cut its profit outlook, the latest high-profile company to warn about growth.

The Dow Jones industrial average .DJI closed down 101.37 points, or 0.75 percent, at 13,457.55. The Standard & Poor's 500 Index .SPX was down 15.30 points, or 1.05 percent, at 1,441.59, its fourth day of losses. The Nasdaq Composite Index .IXIC was down 43.06 points, or 1.36 percent, at 3,117.73.

(Reporting by Blaise Robinson; Editing by Dan Lalor)

• A Permanent Economic Emergency