By Kate Gibson and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- U.S. stock-index futures tipped slightly higher on Wednesday as investors waited to see if the Federal Reserve will make a widely-expected decision to ease monthly bond purchases.
Futures for the Dow Jones Industrial Average (DJZ3) rose 1 point to 15,466, while S&P 500 futures (SPZ3) rose 0.9 point to 1,699.2. Nasdaq 100 futures (NDZ3) added 7 points to 3,191.00.
Reaction was muted to a pre-market report from the Commerce Department, which said builders started work on fewer houses than forecast in August, with housing starts up 0.9% to 891,000.
Shares of FedEx Corp. (FDX) rose 3.3% in premarket activity after the international delivery firm reported fiscal first-quarter results.
"Although the consensus seems to be that a tapering of sorts [by the Fed] has been factored in to the markets, it remains to be seen how investors will react seeing it in black and white, and anything more than a moderate cut will likely see investors run for cover," said Andy McLevey, head of dealing at stock broker Interactive Investor in London.Read: How stocks may react to the Federal Reserve decision
At 2 p.m. Eastern, the Fed will release its policy statement and economic forecasts. Economists polled by MarketWatch are forecasting a $10 billion taper of the Fed's $85 billion-a-month bond purchases. Fed Chairman Ben Bernanke will hold a press conference at 2:30 p.m. Eastern. Also read: Worst reasons for the Fed to taper (and the best)
Investors will also be looking to see if the Fed tweaks its 6.5% unemployment threshold for considering of its first rate hike. Lowering that threshold could amount to the Fed effectively promising lower rates for longer. Read: Besides the taper, 5 things to watch at the Fed
Joshua Mahony, research analyst at Alpari U.K., said any tapering announcement of less than $10 billion to $15 billion a month could trigger a relief rally for stocks, and a selloff for the dollar. The dollar pared back as stock futures inched up. Read: 3 things the Fed might do and what it means for forex.
But the meeting may have a muted effects on stocks as well.
"The well-known strategy of sell on the rumors and buy on the news could very well come into play upon occurrence, where expectation is so high that the actual event could in fact come as somewhat of a non-event," Mahony said in a note to investors.
"That being said, the occurrence of tapering is certainly no given since much of the reduction in the headline unemployment rate on its way to the current 7.3% is driven by a continued fall in the participation rate," he said.
Tuesday also marked another big day for the S&P 500 index (SPX), which finished above 1,700 for the first time since early August, helped in part by a dividend lift from Microsoft Corp. (MSFT).
Adobe Systems Inc. (ADBE) rose 5.7% in premarket action. The software company late Tuesday said fiscal third-quarter profit fell, but its cloud-computing business surpassed 1 million subscribers.
General Mills Inc. (GIS)(GIS) reported fiscal first-quarter profit of 70 cents a share, in line with forecasts, while sales grew 7.9% to $4.37 billion.
-Kate Gibson; 415-439-6400; AskNewswires@dowjones.com
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(END) Dow Jones Newswires
09-18-13 1054ETCopyright (c) 2013 Dow Jones & Company, Inc.
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