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 Investors are expecting policymakers this afternoon will cut rates for a third straight meeting, and perhaps indicate that more might be forthcoming. Most economists are expecting a quarter-point cut in the federal funds rate to 4.25 percent
-- though there are some hoping for a half-point cut in the Fed's last meeting this year.
The central bank has been trying to help the economy weather a severe slump in housing, spreading mortgage defaults and financial market turbulence. But, there has been fresh evidence just this week that the world's banks and brokerages are still suffering from the subprime loan fallout.
Washington Mutual Inc. became the latest lender to resort to a massive stock sale to shore up its finances. The nation's largest savings and loan also said late Monday it will close offices, lay off more than 3,000 workers, slash its dividend, and set aside up to $1.6 billion for loan losses in the fourth quarter.
Word of WaMu's plan to sell $2.5 billion worth of convertible preferred stock came just hours after Switzerland-based UBS AG said it would sell $11.5 billion in shares to Singapore's sovereign-wealth fund, and to an unidentified investor in the Middle East.
Wall Street might get a clearer picture about how four of its biggest investment banks have fared over the quarter. Lehman Brothers Holdings Inc. will report results on Thursday, while Goldman Sachs Group Inc., Morgan Stanley and Bear Stearns Cos. are scheduled for next week.
Stocks rose Monday as expectations for an interest rate cut, sending the Dow Jones industrials up more than 100 points. Stocks have gained in the past few weeks as investors grew more confident in the Fed's openness to loosening its policy again.
Ahead of Tuesday's market opening, Dow futures rose 10, or 0.02 percent, to 13,761, while Standard & Poor's 500 futures edged up 1.90, or 0.13 percent, to 1,520.70, and Nasdaq 100 index futures added 5.00, or 0.34 percent, to 2,145.50.
Bond prices also edged up. The 10-year Treasury note's yield, which moves opposite the price, fell to 4.15 percent from 4.16 percent late Monday.
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 Oil prices rose in anticipation of a rate cut, a move that could bolster energy demand from world's biggest oil consumer. Light, sweet crude for January delivery rose 53 cents to $88.39 a barrel in electronic trading on the New York Mercantile Exchange.
Besides the Fed decision expected at 2:15 EST, investors will also be examining fresh retail sales numbers with just two weeks left until Christmas. Two weekly retails sales reports
-- The International Council of Shopping Centers-UBS Index and the Johnson Redbook Retail Sales Index
-- are set for release at 7:45 a.m. and 8:55 a.m. EST.
In addition, the Commerce Department is scheduled to release its monthly wholesale trade report, based on a survey of about 4,500 companies, at 10 a.m. EST. Data is expected to show that wholesale inventories rose at a slower rate in October than the month before, a sign that distributors may be trying to limit their stockpiles in the face of weak retail sales.
In corporate news, Texas Instruments Corp. is expected to rise after the chipmaker lifted the low end of its earnings and revenue outlook, but shaved the top end of its revenue outlook. Strength in demand for chips to power notebooks offset weakness in wireless, the technology company said.
Semiconductor maker STMicroelectronics NV said it will acquire California-based Genesis Microchip Inc. for $336 million. Genesis shareholders have been offered $8.65 each, up from its $5.40 closing price on Monday.
Overseas, Japan's Nikkei stock average closed up 0.76 percent, while Hong Kong's Hang Seng index added 2.55 percent. Britain's FTSE 100 fell 0.53 percent, Germany's DAX index shed 0.21 percent, and France's CAC-40 dropped 0.35 percent.
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On the Net:
New York Stock Exchange: http://www.nyse.com/
Nasdaq Stock Market: http://www.nasdaq.com/
[Associated Press; By JOE BEL BRUNO]
Copyright 2007 The Associated Press. All rights reserved. This
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