Futures dip as investors await Fed statement
Stock index futures fell on Wednesday as investors waited to see if the Federal Reserve launches a fresh effort to boost the sluggish economy.
The Fed, ending a two-day policy meeting Wednesday, is expected to announce a rebalancing of its bond portfolio weighted more heavily to longer-term securities, pushing already-low long-term interest rates even lower in a move dubbed Operation Twist.
The Fed will issue a statement at about 2:15 p.m.
Operation Twist is unconventional and the best they could offer, said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. But what will this do in terms of economic growth? I suspect very little. What it will do is obviously keep long-term rates in check. and that will ease the pain and keep the real estate market from declining further.
I think the Fed will satisfy the market, but since we are in a short-term overbought situation, even if the Fed doesn't disappoint, we might see a short-term pullback.
S&P 500 futures fell 6 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 33 points, and Nasdaq 100 futures fell 12.75 points.
Existing home sales data for August from the National Association of Realtors is due at 10 a.m. EDT. Economists polled by Reuters predicted a 1.4 percent increase for August, following a 3.5 percent decline in July.
Oracle Corp
Design software maker Adobe Systems Inc's
General Motors Co's
European shares were down 1.3 percent on Wednesday after strong gains the previous day, although technology shares outperformed after Oracle's upbeat outlook. <.EU>
U.S. stocks ended little changed on Tuesday in the lowest volume session since late August as investors waited to see if the Fed would offer more economic stimulus and if Greece made progress in talks to avoid a default.
(Reporting by Angela Moon; editing by Jeffrey Benkoe)
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