Stock index futures signal dip ahead of Fed

 @ibtimes
on August 12 2009 6:08 AM

Stock index futures pointed to a lower open on Wall Street on Wednesday as investors awaited the outcome of the Federal Reserve's two-day meeting.

At 4:18 a.m. EDT, futures for the S&P 500 were down 0.41 percent, Dow Jones futures were down 0.28 percent and Nasdaq 100 futures were down 0.53 percent.

The Fed's policy-setting committee, which is seen holding its benchmark overnight rate in a range of zero to 0.25 percent, is expected to give a nod to signs the U.S. recession is abating but will likely warn that the recovery will be slow and dampen any expectations it will soon start to raise interest rates. Its statement is due at around 2:15 p.m. EDT.

On the earnings front, companies expected to report results on Wednesday include Macy's , Harris and Sara Lee .

Applied Materials Inc , the world's largest producer of chip-making gear, will be in the spotlight after saying it would at least break even this quarter thanks to new orders and deep cost cuts.

Nestle , the world's biggest food group, missed forecasts with organic sales growth of 3.5 percent in the first half, and pared its full-year outlook, saying only it sees faster growth in the second half.

BHP Billiton , the world's largest miner, gave a cautiously optimistic outlook for commodities demand on Wednesday after posting a 51 percent dive in second-half profit, its first profit fall in seven years. It said demand in China and India had returned earlier than many had expected, driven mainly by restocking, but it noted that the rebuilding of stocks in China was now largely over.

Japan's Nikkei average <.N225> retreated from 10-month highs on Wednesday <.T>, while European stocks were down 0.4 percent in morning trade, led lower by Nestle as well as banking stocks after disappointing earnings from ING . <.EU>

Oil steadied below $70 on Wednesday after four consecutive days of losses as the market waited for a second set of U.S. inventory data and kept an eye on the outcome of the Fed's meeting.

U.S. stocks lost ground on Tuesday after a prominent banking analyst warned the sector's fundamentals have yet to improve, and an unexpectedly large drop in wholesale inventories reignited concerns about an economic recovery.

The Dow Jones industrial average <.DJI> closed down 96.28 points, or 1.03 percent, to 9,241.67. The Standard & Poor's 500 Index <.SPX> fell 12.77 points, or 1.27 percent, to 994.33. The technology-laced Nasdaq Composite Index <.IXIC> slid 22.51 points, or 1.13 percent, to 1,969.73.

(Reporting by Blaise Robinson; Editing by Hans Peters)

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