Stock futures point to higher opening ahead of Fed announcement

Stock futures are indicating a higher opening on Wall Street Wednesday ahead of data on consumer prices and housing and the Federal Reserve's decision on interest rates.
DEC 16, 2009
Stock futures are indicating a higher opening on Wall Street Wednesday ahead of data on consumer prices and housing and the Federal Reserve's decision on interest rates. Overseas markets were mostly higher. The Fed, which concludes its two-day meeting this afternoon, is expected to stick to its easy monetary policy and keep rates unchanged. Before that decision, the Labor Department is set to report on consumer prices for November, a day after government data showed wholesale prices jumped more than expected. Consumer prices are expected to have risen, driven by more expensive energy products. Economists surveyed by Thomson Reuters expect consumer prices rose by 0.4 percent last month following a 0.3 percent increase in October. Excluding food and energy, they expect core inflation will show a smaller 0.1 percent rise, lower than the 0.2 percent increase in October. At the same time, the Commerce Department reports on housing construction and applications for building permits in November. Housing construction likely posted a big rebound, helped by better weather. Economists expect new home construction to increase to an annual rate of about 580,000 in November. Ahead of the opening bell, Dow Jones industrial average futures rose 34, or 0.3 percent, to 10,492. Standard & Poor's 500 index futures rose 5.00, or 0.5 percent, to 1,108.90, while Nasdaq 100 index futures rose 11.00, or 0.6 percent, to 1,806.00. On Tuesday, stocks fell for the first time in five days and Treasurys slipped after a jump in wholesale prices spooked investors, wondering if the Federal Reserve would be forced to raise interest rates. The Fed isn't expected to raise rates from their record low level, but the economic data was a reminder the central bank could be forced to act sooner than expected to keep inflation at bay. The Fed's statement on rates and policies is expected at 2:15 p.m. EST. Meanwhile, bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.58 percent from 3.60 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.05 percent from 0.03 percent. The dollar fell against other major currencies, while gold prices rose. Overseas, Japan's Nikkei stock average rose 0.9 percent. In afternoon trading, Britain's FTSE 100 was up 0.2 percent, Germany's DAX index was up 1.1 percent, and France's CAC-40 was up 0.8 percent.

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