MW: U.S. stocks set for small gains ahead of Fed call
Wall Street was set for a mildly higher open on Wednesday, with investors eagerly waiting to see whether the latest Federal Reserve decision signals a rate hike this year.
Most economists expect the central bank to keep rates on hold for now, so the big question is whether policy makers suggest a rate increase is in the cards for the December.
“A change in policy is not, perhaps, terribly likely. A change in the nuance of the statement is perhaps more plausible. However, the divide between markets and economists over the future path of the Fed remains significant,” said Paul Donovan, economist at UBS, in a note.
Ahead of the decision, futures for the Dow Jones Industrial Average YMZ5, +0.14% rose 19 points, or 0.1%, to 17,532, while those for the S&P 500 index ESZ5, +0.22% climbed 4.10 points, or 0.2%, to 2,064.50. Futures for the Nasdaq 100 index NQZ5, +0.31% gained 12.25 points, or 0.3%, to 4,644.50.
The indicated gains would follow two straight days in negative territory, when slumping oil prices, soft economic data and caution ahead of the Fed statement all combined to hit investor sentiment.
The Fed’s rate decision comes out at 2 p.m. Eastern Time. Read: Here’s what the Fed statement could look like. Ahead of that, a reading of advance trade in goods for September is due at 8:30 a.m. Eastern.
Earnings: Corporate results were also in the spotlight, with shares of Apple Inc. AAPL, -0.63% rising 1.8% premarket after the tech company reported fourth-quarter earnings after Tuesday’s closing bell. The iPhone maker said profit jumped 31% in the quarter, fueled by strong demand for handsets in China.
On a more downbeat note, shares of Twitter Inc. TWTR, +1.46% slumped 11% ahead of the bell. The social networking company late Tuesday delivered a lower-than-forecast revenue outlook.
Ahead of the bell Wednesday, earnings reports are expected from chocolate maker Hershey Co. HSY, -0.66% drugstore chain Walgreens Boots Alliance Inc. WBA, +6.35% food conglomerate Mondelez International Inc. MDLZ, -0.43% and newly-listed car maker Ferrari NV RACE, -2.13%
Walgreens said late Tuesday it would buy rivalRite Aid Corp. RAD, +42.60% in an all-cash deal valued at $17.2 billion, including debt. Rite Aid shares were down 7.2% ahead of Wednesday’s opening bell, while Walgreens was unchanged.
After the closing bell, PayPal Holdings Inc. PYPL, -1.37% and GoPro Inc. GPRO, -1.95% are slated to report.
Corporates : Royal Dutch Shell PLC RDS.B, -1.68% RDSB, +0.44% said Tuesday it will abandon the construction of a major oil-sands project in Western Canada and take a $2 billion write-down.
Volkswagen AG VLKAY, -2.60% VOW3, +3.75% the German car maker embroiled in an emissions-cheating crisis, said Wednesday it swung to a 1.73 billion-euro ($1.9 billion) third-quarter net loss and issued a full-year profit warning, as the cost of repairing tainted diesel-powered cars began to slam earnings.
U.K. market authorities have given Anheuser-Busch InBev NV another week to finalize the terms of its 67.9 billion pound ($103.95 billion) takeover offer for SABMiller PLC.
Other markets: European markets traded higher after the Swedish Riksbank extended its bond-buying program to boost inflation.
Asian markets closed mostly lower, with investors jittery ahead of the Fed decision.
Crude oil prices CLZ5, +0.51% jumped 0.7% after sliding to a two-month low on Tuesday.
Metals prices were mainly higher, while the dollar DXY, -0.09% slipped against most major currencies.
