NEW YORK ( TheStreet) -- Stock futures were holding gains Tuesday as investors weighed moderate inflation numbers and less-than-expected housing starts heading into the first-day of the Federal Reserve's two-day policy meeting.
Futures for the S&P 500 were up 2.75 points, or 4.51 points above fair value, to 1,636.5.
The Bureau of Labor Statistics Tuesday reported that the consumer price index rose by a less than expected 0.1% in May after falling 0.4% in April. Economists on average were expecting the CPI to rise 0.2%. Excluding food and energy, the core CPI increased 0.2%, as expected, after rising 0.1% the prior month.
The Census Bureau meanwhile reported that housing starts rose 6.8% to a seasonally adjusted annual rate of 914,000 in May, which was less than the 950,000 pace expected by economists. Building permits last month fell 3.1% to a lower than expected seasonally adjusted annual rate of 974,000. Economists were predicting a pace of 975,000 for building permits.Another month of weak inflation numbers has fueled confidence among some investors that the Fed will not look to reduce its $85 billion-a-month asset purchase program just yet as bond yields continue to rise. However, the market is bracing for the possibility Fed Chairman Ben Bernanke will indicate during his press conference Wednesday that a slowdown in purchases has become more conceivable amid signs of an improving economy. Futures for the Dow Jones Industrial Average were rising 31 points, or 51.15 points above fair value, to 15,152 while the futures for the Nasdaq were adding 9 points, or 9.44 points above fair value, to 2,973.75. Sony (SNE - Get Report) was rising 3.9% to $21.53 in premarket trading as Daniel Loeb's hedge fund, Third Point, raised its stake in the Japanese electronics maker to 6.9%. Loeb sent a letter Tuesday to Sony CEO Kazuo Hirai to reiterated his argument that Sony should sell a 15% to 20% stake in its entertainment division, according to the The Wall Street Journal which reviewed the letter. Loeb recommends in the letter that Hirai serve as chairman of both the electronics business and the spun-off entertainment business. Elan (ELN) shares were rising 2.22% to $13.75 after Jefferies elevated its price target on the drug maker to $19 from $14 as Elan puts itself up for sale following an $8 billion hostile bid from Royalty Pharma. Major U.S. stock markets pared gains Monday afternoon following a Financial Times report that the Federal Reserve is likely to address tapering of its monetary stimulus. Skullcandy (SKUL - Get Report) was shedding 2.97% to $5.56 as the headphone maker said it has begun the search for a new CFO following Kyle Wescoat's decision to resign, and is relocating its marketing, creative, business development and legal departments, as well as certain sales and international personnel to its headquarters in Park City, Utah. The company will close its office in San Clemente, Calif., which has historically housed significant portions of these functions. Sprint (S) sued Dish Network (DISH - Get Report) on Monday, looking to block the satellite-TV provider's tender offer for Clearwire (CLWR). Sprint is the majority owner of Clearwire. The lawsuit came one day before a deadline for Dish to sweeten its earlier $25.5 billion bid to buy Sprint, which has endorsed a competing bid by Japan's SoftBank, according to Reuters. The DAX in Germany was unchanged and the FTSE 100 in London was up 0.85%. The Hong Kong Hang Seng finished flat, while the Nikkei 225 in Japan closed down 0.2%. August gold futures were falling $10.90 to $1,372.20 an ounce, while July crude oil futures were up 32 cents to $98.09 a barrel. The benchmark 10-year Treasury was falling 2/32, raising the yield to 2.192%. The dollar was down 0.01% to $80.78 according to the