Stocks Set to Open Lower on Fed Jitters
Wednesday January 31, 8:35 am ET
Dow, Nasdaq Poised to Open Lower on Jitters Before Federal Reserve Decision on Interest Rates
LONDON (AP) -- U.S. stock futures drifted lower on Wednesday on jitters before the Federal Reserve's interest-rate decision, and more importantly, on the Fed's policy statement, with another wave of earnings from corporate titans including Boeing and Altria to come.
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S&P 500 futures slipped 3.3 points at 1,430.70 and Nasdaq 100 futures dropped 5.5 points at 1,783.75. Dow industrial futures declined 22 points.
U.S. stocks closed Tuesday on an upbeat note, with the Dow industrials rising 32.5 points, the Nasdaq Composite adding 7.6 points and the S&P 500 up 8.2 points. Energy stocks benefited from a recovery in oil futures.
Oil held below the $57 a barrel mark in electronic trade, before the release of weekly inventory data, due out at 10:30 p.m. EST.
The Fed's decision is due at 2:15 p.m. EST. Economists are expecting rates to stay at 5.25 percent, and traders will be closely monitoring the Fed's statement for clues on whether it will cut rates in the future. Some economists are now expecting rate hikes by the end of the year.
A rate cut in March or May had been seen as a virtual slam dunk six weeks ago, but strong growth over the past month has forced many economists to push back the timing of any easing. Previous market views that the Fed would cut three to five times in 2007 have been diminished to an expectation of one or two cuts.
Also out will be the ADP employment report for January, and statistics on Chicago-area PMI and December construction spending.
The dollar weakened against the Japanese yen, but rose against the euro and the British pound.
Of companies in the spotlight, Boeing, Altria, Eastman Kodak, and Eli Lilly are all due to report quarterly results. After the close of trading, Internet search giant Google will unveil its latest financial report.
Juniper Networks may see pressure after it gave preliminary statistics on its last quarter, but didn't file its quarterly statement with the Securities and Exchange Commission due to a stock option grant probe. Revenue rose 4 percent in the fourth quarter, and it expects revenue in 2007 between $615 million and $625 million.
SanDisk may also decline after it said there's an oversupply of NAND flash memory chips.
Elsewhere, Corus Group rallied in London trade after Tata Steel outlasted Brazilian rival CSN in an auction for the Anglo-Dutch steelmaker. Tata bid $12.1 billion for Corus.
Vodafone Group also rose in London after the mobile service operator added more subscribers than forecast in the last quarter.
Overseas stock markets were generally lower ahead of the Fed statement. The Nikkei 225 closed 0.6 percent lower in Tokyo, and the FTSE 100 edged 0.1 percent lower in late morning trading in London.
The Shanghai Composite tumbled over 4 percent after a Chinese government official was quoted as saying there were signs of a stock market bubble.
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