Stock Market Today: Futures Up Slightly as Market Awaits Fed

NEW YORK (TheStreet) -- U.S. stock index futures were trading little changed Wednesday as investors refrained from making any bold moves, bracing for any changes to the Federal Reserve's language when it makes a rates announcement this afternoon.

Dow Jones Industrial Average futures were up 5 points, or 17.03 points above fair value after setting a new intraday high on Tuesday and finishing just shy of its record close of 17,138. S&P 500 futures were higher by 1.25 points, or 2.42 points above fair value. Nasdaq futures were also up 1.2 points, or 1.63 points above fair value.

Stocks finished on solid footing Tuesday on a report that China is injecting large-scale stimulus to its top banks. Stocks also got a boost after The Wall Street Journal's Jon Hilsenrath reported that the Fed may be keeping its "considerable time" wording on near-zero interest rates in Wednesday's policy projections.

While a growing number of Wall Street strategists forecast a bump up in interest rates sooner than many expect -- to as early as the first quarter of next year -- Scott Wren, senior equity strategist at Wells Fargo, still expects that the markets will have to wait until the fall of next year to see the first increase. He explained that the Fed would not want to make the mistake of raising interest rates too soon and risk tipping the economy back toward a slower pace of growth.

"The Fed is not going to need to hurry and is going to be very careful," said Wren.

Ed Yardeni, chief investment strategist at Yardeni Research, added that Fed Chair Janet Yellen is bound to tone down any hawkishness in the Fed statement by stressing that labor market conditions remain weak. She will also reiterate that wage inflation remains too low, Yardeni predicted.

"In my opinion, she is likely to remain 'The Fairy Godmother of the Bull Market,'" said Yardeni.

The interest rate announcement will take place at 2 p.m. EDT, followed by a press conference with Yellen at 2:30 p.m.

The consumer price index for August fell 0.2% compared with economists' calls for a flat reading. The index rose 0.1% in July.

The other economic report expected Wednesday is the National Association of Home Builders Housing Market Index for September at 10 a.m. EDT.

In corporate headlines Wednesday, Endo International (ENDP) made an unsolicited offer for Auxilium Pharmaceuticals (AUXL) that values Auxilium at $28.10 a share, a 31% premium to Auxilium's closing price on Tuesday of $21.52. Auxilium surged 40.85% in premarket trading.

Sony (SNE) said Wednesday it expects its annual loss to widen to $2 billion and has canceled dividends for the first time in more than half a century after writing down the value of its troubled smartphone business. Sony lost over 10% in premarket trading.

Homebuilder Lennar (LEN) posted fiscal third-quarter profit of 78 cents a share, up from 54 cents a year earlier.

Microsoft (MSFT) raised its quarterly dividend by 11% to 31 cents a share.

Software maker Adobe Systems (ADBE) posted fiscal third-quarter revenue on Tuesday that was below Wall Street's expectations.

FedEx (FDX) rose 2.03% after the shipping giant reported earnings growth of 37% to $2.10 a share on a revenue increase of 6% to $11.7 billion amid solid volume and sales increases at FedEx Freight. Analysts expected $1.96 in EPS on revenue of $11.48 billion.

FedEx said on Tuesday it would raise U.S. rates for express, ground and home-delivery shipments in January by an average of 4.9%.

General Mills (GIS) shed 3.25% after the packaged goods company posted a 25% drop in quarterly net income to $345.2 million. Revenue also slipped as the company said that it was facing a tough U.S. market environment.

The SPDR Gold Trust (GLD) and the United States Oil Fund (USO)  were flat. 

-- By Andrea Tse and Kurumi Fukushima in New York

Follow @AndreaTTse

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