By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) â" U.S. stock-index futures gained on Tuesday, buoyed by a well-received Irish bond auction, as investors waited to see whether the Federal Reserve will take more measures to spur economic growth.
Futures on the Dow Jones Industrial Average /quotes/comstock/19*!dy10z (DJZ10 10,670, +130.00, +1.23%) Â rose 10 points to 10,681 and S&P 500 futures /quotes/comstock/21m!f1:sp\z10 (SPZ10 1,138, +1.30, +0.11%) Â were little changed at 1,137.
Nasdaq 100 futures /quotes/comstock/21m!f:nd\z10 (NDZ10 1,986, +4.50, +0.23%) Â added 3.75 points to 1,985.50.
Fed meeting may disappoint markets
John Canally tells MarketWatch's Greg Robb that the Federal Reserve may hint, but not pull the trigger on more quantitative easing â" and stocks may drop as a result.
The blue-chip Dow index /quotes/comstock/10w!i:dji/delayed (DJIA 10,754, +145.77, +1.37%) Â rallied 1.4% on Monday to end at 10,753.62, marking its highest close since May 13. The Dow has gained 7.4% so far this month and is currently on track for its best September performance since 1939, according to index data from Dow Jones.
âThere is no doubt that generally investors are overlooking all the bad signs in the economy,â said Mads Koefoed, market strategist at Saxo Bank. âWe had a bad housing number yesterday, but nothing bites right now.â
The NAHB/Wells Fargo housing-market index remained at multimonth lows in September, data showed on Monday, but investors focused instead on positive earnings reports and a declaration by a research group that the U.S. recession ended in June 2009.
More housing data are on the calendar Tuesday, with housing starts for August due at 8:30 a.m. Eastern time.
Asian stocks were mixed overnight, with Japanâs Nikkei Stock Average ending down 0.3%.TODAY'S TOP MARKET STORIES
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In Europe, equity markets rose, as a well-received Irish bond auction buoyed sentiment. The Stoxx Europe 600 index /quotes/comstock/22c!sxxp (ST:SXXP 267.20, +0.98, +0.37%) Â gained 0.2% to 266.70 points in afternoon trade.
The event of the day is the Fedâs policy announcement at 2:15 p.m. Eastern. The main question is whether the Fed will make any further moves to spur economic growth, particularly by purchasing government bonds to add more money to the system, a strategy known as quantitative easing.
âPerhaps the market is setting itself up for a letdown if the FOMC [Federal Open Market Committee] decides to do nothing today,â Koefoed said. âWe expect more quantitative easing, but itâs too soon right now. We think itâs much more likely they will do it in November.â
Jeffrey Kleintop, chief market strategist at LPL Financial, said the Fed has historically provided additional stimulus at this point in the economic cycle.
âWe put about a 25% chance of quantitative easing in September, with a greater chance of action at the November meeting scheduled the day after the mid-term elections,â Kleintop said in a note to clients.
âIf the Fed does act and announces action at their meeting on Tuesday, the stock market may break out of its current range to the upside,â he said.
On the corporate front, ConAgra Inc. /quotes/comstock/13*!cag/quotes/nls/cag (CAG 22.37, +0.28, +1.27%) , AutoZone Inc. /quotes/comstock/13*!azo/quotes/nls/azo (AZO 220.14, -0.74, -0.34%) Â and Carnival Corp. /quotes/comstock/13*!ccl/quotes/nls/ccl (CCL 37.06, +1.14, +3.17%) Â are all scheduled to report quarterly results on Tuesday.
Shares of Nokia Corp. /quotes/comstock/13*!nok/quotes/nls/nok (NOK 10.27, +0.31, +3.11%) Â fell 3% in premarket trading after the mobile-phone maker announced it will delay delivery of its N8 smartphone by a few weeks.
In Milan, shares of Italian banking group UniCredit SpA /quotes/comstock/23g!ucg (IT:UCG 1.90, -0.04, -1.96%) Â dropped 1% following media reports that its chief executive, Alessandro Profumo, is likely to resign at a special board meeting on Tuesday.
In the currency markets, the dollar fell against most of its major rivals, with the dollar index /quotes/comstock/11j!i:dxy0 (DXY 81.04, -0.30, -0.36%) Â trading down 0.4% to 81.052. The euro gained 0.6% to $1.3136 and the greenback dropped to 85.43 Japanese yen.
Oil futures slipped 70 cents to $74.16 a barrel in electronic trading on Globex, while gold futures traded at $1,281.30 an ounce.
Polya Lesova is reporter for MarketWatch, based in Frankfurt.Powered By iWebRSS.com