The Labor Department will release at 8:30 a.m. ET first-time claims for jobless benefits for the week ended February 25. Economists in a Reuters survey forecast 351,000 new filings, a repeat of the previous week's number.

U.S. Federal Reserve chairman Ben Bernanke testifies on "The Semiannual Monetary Policy Report to the Congress" before the Senate Banking Committee.

Bernanke on Wednesday offered a tempered view of the economy, pouring cold water on the notion recent upbeat signs heralded a stronger recovery. He told Congress that unless growth accelerated, the unacceptably high unemployment rate would not keep dropping.

The Institute for Supply Management releases at 10 a.m. ET its February manufacturing index. Economists expected a reading of 54.5, versus 54.1 in January.

Kroger (KR.N), the biggest U.S. supermarket chain, reports quarterly results and Wall Street has priced in a profit of 49 cents per share, up from 46 cents a year ago.

The Commerce Department releases at 8:30 a.m. ET January personal income and consumption data. Economists expected a 0.4 percent rise in both income and spending. In December, income rose 0.5 percent and spending was unchanged.

The Commerce Department releases at 10 a.m. ET January construction spending figures. Economists forecast a rise of 1.0 percent, compared with 1.5 percent in December.

China's factories grew more than expected in February as new export orders for big firms bounced back, a government survey found, while a private-sector report portrayed a different picture of smaller companies lagging the rebound.

Bank of America (BAC.N) is planning to introduce a monthly fee for customers holding checking accounts unless they agree to bank online, buy more products or maintain certain balances, the Wall Street Journal reported.

General Motors (GM.N) and PSA Peugeot Citroen (PEUP.PA) will form a global alliance targeting a cut in annual costs of at least $2 billion without plant closures or job cuts in Europe.

James Murdoch resigned as executive chairman of News International on Wednesday, raising new doubts he can succeed his father Rupert as CEO of parent company News Corp (NWSA.O) in the wake of a phone hacking scandal at the unit he oversaw.

European shares .FTEU3 were steady as investors digested central bank cash injections and looked for a catalyst for fresh gains.

The Dow Jones industrial average .DJI shed 53.05 points, or 0.4 percent, to close at 12,952.07 on Wednesday. The Standard & Poor's 500 Index .SPX slipped 6.50 points, or 0.5 percent, to 1,365.68. The Nasdaq Composite Index .IXIC dropped 19.87 points, or 0.7 percent, to 2,966.89.

(Reporting by Atul Prakash; Editing by Dan Lalor)

• A Permanent Economic Emergency