BLBG: U.S. Stock-Index Futures Are Little Changed Before Fed
U.S. stock-index futures were little changed, signaling the Standard & Poor’s 500 Index will remain near six-week high, as investors awaited a Federal Reserve announcement on the prospects for stimulus.
FedEx Corp. rose 3 percent in early New York trading as earnings topped estimates. Dollar Tree Inc. gained 3.5 percent after adopting a $2 billion program of buybacks. Adobe Systems Inc. rallied 4.4 percent after the largest maker of graphic-design tools said it amassed more than 1 million customers for its online services.
S&P 500 (SPX) futures expiring in December added 0.1 percent to 1,700 at 7:40 a.m. in New York. The benchmark index climbed to 1,704.76 yesterday, less than five points below its all-time high of 1,709.67 reached on Aug. 2. Contracts on the Dow Jones Industrial Average increased 10 points, or less than 0.1 percent, to 15,475 today.
“Fed tapering seems to be priced in,” Stephane Ekolo, chief European strategist at Market Securities in London, said in an interview. “Most investors expect the Fed to scale back in its monthly bond purchases, a reduction in the corridor of $5 billion to $15 billion.”
The Federal Open Market Committee wraps up a two-day policy meeting today. Analysts are divided on the amount by which the Fed will scale back its monthly asset purchases. Among 64 economists surveyed by Bloomberg News, 33 predict it will reduce its buying of Treasuries by $5 billion or less, with 31 forecasting a cut of $10 billion or more.
Bernanke Signals
Speculation over the future of the Fed’s quantitative easing program has whipsawed global asset prices since May, when Chairman Ben S. Bernanke first signaled cuts may start in 2013. The S&P 500 tumbled 5.8 percent from a record on May 21 through June 24. It rebounded 8.7 percent to close at a record last month, before slumping as much as 4.6 percent.
The FOMC releases both its policy statement and forecasts for economic growth, inflation and unemployment at 2 p.m. Washington time. Bernanke will hold a press conference half an hour later.
Data today may show U.S. housing starts climbed to a 917,000 annualized pace in August from an 896,000 rate the previous month, according to the Bloomberg survey median before the Commerce Department releases the figures at 8:30 a.m. in Washington. Building permits, a gauge of future construction, fell 0.4 percent, economists projected.
FedEx (FDX) rallied 3 percent to $114. The world’s largest cargo airline reported first-quarter earnings of $1.53 a share, beating the $1.50 average estimate in a Bloomberg survey of analysts. The company affirmed its full-year profit forecast.
Dollar Tree
Dollar Tree added 3.5 percent to $57.79. The discount-store operator said its board authorized $2 billion in equity repurchases. The Chesapeake, Virginia-based company also said it agreed with JPMorgan Chase & Co. to buy back $1 billion in shares under a variable maturity accelerated program.
Adobe climbed 4.4 percent to $50.25 in pre-market New York trading. The number of Web subscribers jumped 47 percent in the fiscal third-quarter, even as sales and profit declined.
Wynn Resorts Inc. may be active. The casino operator controlled by Steve Wynn said it will consider investing more than $4 billion in Japanese casino resorts if it wins permission, joining Las Vegas Sands Corp. and MGM Resorts International in seeking expansion in the Asian nation.
To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net
