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Stock futures point higher on Fed pause hopes
Monday September 18, 7:06 am ET
By Vivianne Rodrigues


NEW YORK (Reuters) - U.S. stock futures pointed to a higher opening on Monday, extending last week's gains, on expectations the Federal Reserve will keep interest rates unchanged.
Shares of Ford Motor Co. (NYSE:F - News) rose in European trading after industry newspaper Automotive News reported on Monday that senior executives at the automaker and at General Motors Corp. (NYSE:GM - News) discussed a merger or alliance. For details, see (ID:nN18229034). General Motors shares edged lower in Europe.




Stocks have been on a steady climb since mid-August following the Fed's first pause after 17 straight rate increases. The Fed's Open Market Committee will decide on Wednesday whether to raise the target for its benchmark rate.

"The FOMC meeting is the main feature of the week, and if the Fed does keep rates at the present levels, we may see stocks extending gains," said Peter Cardillo, chief market analyst, S.W. Bach & Co. in New York.

Standard & Poor's 500 futures (SPZ6) were up 1.80 points, above fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures (DJZ6) were up 12 points and Nasdaq 100 (NDZ6) futures were up 3.50 points.

Oil prices (CLc1) rose slightly for a second day, gaining 0.4 percent at $63.61 a barrel and end the steepest slump in more than a decade. While lower energy prices may ease inflation worries, they could also weigh on energy stocks.

"It seems oil prices are getting stable within this range of $60 and $65 a barrel," said Cardillo. "That should help on the inflation front and continue being friendly to stocks."

Rural telephone provider Citizens Communications Co. (NYSE:CZN - News) said on Monday it agreed to buy Commonwealth Telephone Enterprises Inc. (NASDAQ:CTCO - News) in cash and stock for a total of $1.16 billion.

Investors will also watch the publication of the National Association of Home Builders Index for September at 1 p.m. (1700 GMT). Other scheduled economic items include second-quarter current account figures at 8:30 a.m. (1230 GMT).

Stocks rose on Friday, with the Dow Jones industrial average (^DJI - News) closing just 109.42 points from its May 10 high of 11,670.19. And the Nasdaq Composite Index (NASDAQ:^IXIC - News) recorded its sixth straight session of gains.