Stock Futures Mostly Lower Ahead of Fed Statement

NEW YORK (TheStreet) -- Stock futures were trading mostly lower Thursday as investors waited for the Federal Reserve to announce what it would do next to help support the U.S. economy.

Futures for the Dow Jones Industrial Average were declining 23 points, or 10.65 points above fair value, at 13,338. Futures for the S&P 500 were down more than 2 points, or 0.99 points above fair value, at 1437. Futures for the Nasdaq were behind by 7 points, or 2.08 points below fair value, at 2789.

"We expect the FOMC to announce a return to asset purchases and a move in the forward guidance for the funds rate to at least mid-2015 on Thursday," said researchers at Goldman Sachs.

"We expect the FOMC statement to issue a strong verbal easing by pushing the fed funds exit guidance from 'late 2014' to either mid- or late-2015 -- or it may be more directly tied to economic developments," said Joseph LaVorgna, chief U.S. economist at Deutsche Bank. "In addition, we also expect the Fed to announce another round of quantitative easing, which will likely include both Treasuries and MBS. Contrary to prior rounds of QE, we do not expect a fixed size or end-date to be announced, rather policymakers will pursue an adjustable, open-ended program which will be modified as economic conditions warrant."

The Federal Open Market Committee policy announcement is scheduled for 12:30 p.m. EDT.

U.S. stocks finished in positive territory Wednesday as investors mostly stood pat as the Fed kicked off its two-day policy meeting.

The Labor Department said Thursday that initial claims for the week ended Sept. 8 increased 15,000 to 382,000, up from the previous week's upwardly revised 367,000. Analysts were expecting jobless claims of 369,000.

The four-week moving average was 375,000, an increase of 3,250 from the previous week's revised average of 371,750.

Continuing claims in the week ended Sept. 1 were 3.283 million, a decrease of 49,000 from the preceding week's revised level of 3.332 million. Continuing claims were predicted by economists to have fallen to 3.3 million.

The Bureau of Labor Statistics said Thursday that the producer price index for finished goods rose by a seasonally adjusted 1.7% in August, more than the 1.2% that economists were expecting, after advances of 0.3% in July and 0.1% in June. August marks the largest monthly rise since June 2009.

The core figure increased 0.2%, as expected, after gaining 0.4% in July.

The FTSE in London was flat Thursday and the DAX in Germany was losing 0.35%. The Hong Kong Hang Seng index settled down 0.14% and the Nikkei in Japan finished up 0.39%.

The benchmark 10-year Treasury was rising 7/32, pushing the yield lower to 1.738%. The greenback was falling 0.07%, according to the dollar index.

October crude oil futures were up 16 cents at $97.17 a barrel and December gold futures were up 40 cents at $1734.10 an ounce.

On the corporate front, Apple (AAPL) shares settled higher following the unveiling of the tech giant's iPhone 5 at a media event in San Francisco on Wednesday.

Pier 1 Imports (PIR), the specialty retailer, said fiscal second-quarter earnings rose 58%. It also announced it was raising its full-year earnings guidance.

Dole Food (DOLE) is in advanced talks to sell its packaged foods and Asian fresh fruit and vegetable businesses to Japan's Itochu.

A report from the Nikkei business daily reported that Itochu may pay as much as $1.7 billion.

Dole shares rose almost 10% on Wednesday to $14.07.

Abercrombie & Fitch (ANF)has hired Goldman Sachs as it works to ward off pressure from investors because of its declining stock price, a source familiar with the matter told Reuters.

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--Written by Andrea Tse in New York.



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