Stocks Set for Higher Open

A number of mergers greet traders ahead of the Fed meeting and Cisco's earnings.
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Stocks were headed for a higher open Tuesday as Wall Street was greeted with a host of merger news ahead of the

Federal Reserve

meeting and

Cisco's

(CSCO) - Get Report

earnings.

Futures on the

S&P 500

were trading about 5 points above fair value, and the Nasdaq 100 was set for a 4.5-point gain.

The financial markets are eagerly awaiting the outcome of this afternoon's meeting of the

Federal Open Market Committee

, the policymaking arm of the Fed. Most pundits believe the committee will finally take a break from its two-year rate-hiking campaign and leave the fed funds target at 5.25%.

Going back to June 2004, the Fed has raised rates by a quarter-point at 17 straight meetings. Even though many observers expect the Fed to pause, they haven't ruled out the possibility that more rate increases could be implemented later. For months, the market has been obsessed with the central bank and its efforts to find the balance between keeping inflation under control while at the same time not creating an economic slowdown.

Earnings season is winding down, but corporate deals were heating up. The headliner of the day saw a merger between two data-storage outfits, with

Brocade

(BRCD)

agreeing to acquire

McData

(MCDTA)

for $713 million in stock. Brocade's shareholders will own 70% of the combined company's stock. Brocade also guided higher for the fiscal third quarter.

Separately,

Nokia

(NOK) - Get Report

said it would buy

Loudeye

(LOUD)

for $4.50 a share in cash, or $60 million, in order to give users of its products more options for listening to music. Additionally,

Rent-a-Center

(RCII) - Get Report

disclosed plans to take over rival

Rent-Way

(RWY)

for $10.65 a share, or $281 million in cash.

After the close, networking giant Cisco will report its quarterly earnings. Analysts are looking for a fourth-quarter adjusted profit of 28 cents a share, up from 25 cents a year ago, on $7.9 billion in sales.

To view Farnoosh Torabi's video take on today's market, click here

.

On the research front, Banc of America cut its price target on PC maker

Dell

(DELL) - Get Report

to $22 from $25.