Stock futures signal gains; all eyes on Fed

By @ibtimes on

Stock index futures pointed to a higher open on Wall Street on Wednesday, with futures for the S&P 500 up 0.2 percent, Dow Jones futures up 0.1 percent and Nasdaq 100 futures down 0.2 percent at 0841 GMT (3:41 a.m. EST).

The U.S. Federal Reserve is expected to stick to its super loose monetary policy stance on Wednesday as high unemployment constrains policy-makers' enthusiasm about the economy's recent improvement. The Fed began a two-day meeting on Tuesday that is likely to show central bank policymakers are becoming more upbeat about the economy, but not enough to tighten borrowing costs.

Investors were also bracing for data on U.S. consumer prices, due at 1330 GMT, one day after data showed U.S. producer prices jumped a surprising 1.8 percent last month and industrial output rose firmly, sparking inflation jitters in financial markets. Consumer prices are expected to have risen in November following a surge in energy costs, but underlying inflation pressures are expected to be muted due to weak labor and rental markets.

Data on building permits and housing starts was also expected at 1330 GMT.

The banking sector will be in focus after sources said global regulators will give banks a grace period before forcing them to implement stricter capital rules, easing concerns that lenders might need to issue massive amounts of shares in the near future.

Wells Fargo & Co raised about $12.25 billion in a stock offering on Tuesday to help repay a $25 billion bailout received from the U.S. government last year. The lender also said it will buy Prudential Financial Inc's minority stake in retail brokerage joint venture Wells Fargo Advisors for $4.5 billion.

Design software maker Adobe Systems Inc reported quarterly profit ahead of Wall Street projections, saying demand for its products picked up during November.

Chip maker Broadcom Corp raised its revenue guidance for the current quarter on Tuesday, citing better than expected demand in the broadband and enterprise networking segment.

Emcore Corp , a maker of compound semiconductor-based components and subsystems, posted fourth-quarter results above estimates, helped by a steep fall in operating expenses, and forecast first-quarter revenue above market expectations, sending its shares jumping 13 percent in trading after the bell.

The latest initial public offering backed by private equity firm Blackstone Group priced shares below expectations on Tuesday, and sold fewer shares than anticipated, according to an underwriter.

Essilor , the largest maker of corrective eye lenses, is to buy U.S. group FGX International in a $565 million deal, to boost its presence in the growing market for non-prescription reading glasses.

Japan's Nikkei average rose 0.9 percent to hit its highest close in seven weeks on Wednesday, with bank shares soaring after a report that global banking regulators are eyeing effectively delaying the implementation of new capital rules, while European stocks were up 0.4 percent in morning trade in a broad, if shallow rally.

Oil hovered below $71 a barrel on Wednesday, after snapping a nine-day losing streak a day earlier, as data showing a deep drawdown in U.S. distillate stockpiles outweighed a surprise rise in crude inventories.

U.S. stocks fell on Tuesday, with the Dow and S&P 500 moving off 14-month highs, as a climb in producer prices raised inflation concerns and economic bellwether General Electric issued a flat outlook for 2010.

The Dow Jones industrial average <.DJI> dropped 49.05 points, or 0.47 percent, to end at 10,452.00. The Standard & Poor's 500 Index <.SPX> fell 6.18 points, or 0.55 percent, to 1,107.93. The Nasdaq Composite Index <.IXIC> lost 11.05 points, or 0.50 percent, to 2,201.05. (Reporting by Blaise Robinson; Editing by Hans Peters)

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