US Stock Futures Edge Up Ahead Of Fed Decision

By Polya Lesova

U.S. stock futures edged higher on Wednesday, as investors waited to learn whether the Federal Reserve has decided to take more measures to buoy the sluggish economy.

Futures on the Dow Jones Industrial Average rose 19 points to 11,354 and those on the Standard & Poor's 500 stock index rose 1.8 points to 1,197.80.

Nasdaq 100 futures rose 2.25 points to 2,298.75.

The blue-chip Dow index (DJI) finished marginally higher Tuesday, as the Federal Open Market Committee began its two-day meeting.

The spotlight will remain on the FOMC Wednesday, with a policy statement expected at 2:15 p.m. ET.

With the federal-funds rate near zero, the Fed cannot reduce rates any further to boost the economy, so it may resort to more unconventional measures. Some analysts expect the Fed to announce some form of the so-called Operation Twist, or swapping shorter-maturity government securities for longer-dated ones in an effort to lower longer-term rates.

"The reason why the market is so dead set on more stimulus is because the recovery in the U.S. has come to a screeching halt and everyone including the Fed agrees that the economy desperately needs help," said Kathy Lien, director of global research and analysis at GFT, in a note.

Strategists at ING Bank said with little prospect of meaningful fiscal stimulus, "salvation lies with the Fed and the Fed alone."

On the economic calendar, data on U.S. existing-home sales are due at 10 a.m. ET.

In Europe, equity markets were mostly lower, with the Stoxx 600 index down 0.5%.

M&A

Deal news heated up Wednesday. Brewing giant SABMiller PLC (SAB.JO) agreed to acquire Foster's Group Ltd. (FGL.AU) for 5.10 Australian dollars per share, valuing the Australian firm at $10.17 billion.

In the energy sector, Apache Corp. (APA) agreed to pay $1.75 billion for Exxon Mobil Corp.'s (XOM) U.K. North Sea assets, including the Beryl field and other properties.

Shares of Adobe Systems Inc. (ADBE) rose more than 6% in pre-opening trade. After the close of markets Tuesday, Adobe said it earned 55 cents excluding one-time items in the third quarter, on revenue of just over $1.01 billion. It also forecast fourth-quarter adjusted earnings in a range of 57 cents to 64 cents a share on revenue of $1.08 billion to nearly $1.13 billion.

Shares of Oracle Corp. (ORCL) gained 4.8% in pre-market trading after it reported late on Tuesday that fiscal first-quarter rose 36%, a result that one analyst said should dispel worries of a major slump in corporate technology budgets.

Microsoft Corp. (MSFT) shares were little changed before the bell. The company said late Tuesday that its board approved a 25% rise in the dividend. It also said it will continue repurchasing stock under its $40 billion buyback program, in which $27.8 billion in shares have been repurchased to date.

General Mills Inc. (GIS) was scheduled to release results ahead of the market open.

-By Polya Lesova; 415-439-6400; [e-mail]