Stock futures pointed to a higher opening on Wall Street on Wednesday, as shares continue to rally following the Federal Reserve's aggressive interest rate cut that eased fears over the outlook for the economy.

At 0938 GMT December Standard & Poor's 500 futures were up 0.23 percent, Dow Jones futures were up 0.21 percent, and Nasdaq 100 futures were up 0.06 percent.

Stocks surged the most in four years on Tuesday after the Fed slashed its benchmark short-term rate by half a percentage point. The federal funds rate now stands at 4.75 percent, its lowest level since May 2006.

The Dow Jones industrial average shot up 335.97 points, or 2.51 percent, to end at 13,739.39. The Standard & Poor's 500 Index surged 43.13 points, or 2.92 percent, to finish at 1,519.78. The Nasdaq Composite Index climbed 70.00 points, or 2.71 percent, to close at 2,651.66.

The Fed's decision, aimed at shielding the economy from a credit crunch as well as a slump in the housing sector, came about a month after it cut its discount rate in an emergency move to encourage banks to borrow directly from the central bank.

The Fed did what they were supposed to do and it wasn't a surprise after the payroll (jobs) numbers, said Franz Wenzel, strategist at AXA Investment Managers, in Paris.

They'll be looking very closely at the macro and micro data including earnings statements from the banks and we wouldn't rule out two more cuts by the end of the year. We'd like to see what happened as result of the subprime crisis in the Q3 reporting season.

Investors were also relieved by Lehman Brothers Holdings Inc's quarterly results. The bank reported unexpectedly strong earnings in the three months ended August 31 that helped allay worries about the impact of credit market contraction on the financial sector. Its shares jumped 10 percent to $64.49 on Tuesday.

The closely-watched U.S. brokerage earning season will continue on Wednesday, with quarterly results expected from Morgan Stanley, while Bear Stearns and Goldman Sachs are due to report on Thursday.

U.S. consumer prices and housing starts data for August will also be in focus on Wednesday.

Consumer prices are expected to have remained flat in August, held down by lower gasoline prices. But prices excluding food and energy probably rose at the same rate as in July, economists polled by Reuters said.

According to a Reuters poll of economists, housing starts probably fell to their lowest level in more than 12 years in August as tight credit exacerbated already weak market conditions.

In individual stocks, shares in TD Ameritrade Holding Corp rose 3.3 percent after the closing bell on Tuesday as it said its earnings could top the high end of its forecast.

(Additional reporting by Sitaraman Shankar in London)