Stock futures edge higher ahead of Fed meeting

[November 03, 2010]  NEW YORK (AP) -- Stock futures inched higher Wednesday as investors turned their attention to the Federal Reserve's meeting after there were few surprises in the midterm elections.

By the end of the trading day, investors will likely know exactly how much the Fed plans to spend to stimulate the economy. The central bank has hinted for two months it plans to buy Treasurys to drive interest rates lower in an attempt to spark lending and spending. However, there was still plenty of debate about the size and length of the program, particularly in the past few days.

The Fed is expected to announce details of its plan when it wraps up its meeting Wednesday afternoon. Treasury prices rose slightly, sending interest rates lower ahead of the announcement.

Key economic reports that would have normally affected trading will likely be overshadowed by the Fed's meeting. Reports are due out on jobs, the services sector and factory orders.

Ahead of the opening bell, Dow Jones industrial average futures rose 10, or 0.1 percent, to 11,162. Standard & Poor's 500 index futures rose 1.00, or 0.1 percent, to 1,193.70, while Nasdaq 100 index futures rose 1.75, or 0.1 percent, to 2,152.00.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.57 percent from 2.59 percent late Tuesday.

Payroll company ADP releases its monthly report on whether private employers added any jobs last month. ADP said employers cut jobs in September for the first time in seven months. The report is often used as a gauge heading into the government's monthly employment report, which is due out Friday. Economists predict the government will say

Elsewhere Wednesday, the Institute for Supply Management is expected to say the services sector continued to expand in October, but at a slightly slower pace than September. The report is closely watched because the service sector accounts for about 80 percent of the nation's jobs. Earlier this week, ISM said the growth in the manufacturing activity accelerated last month.

A third economic report is due out from the government that is expected to show factory orders grew in September.

There were no major surprises in Tuesday's midterm elections that should sway trading Wednesday. Analysts said the market had largely accounted for Republicans taking control of the House of Representatives and Democrats holding onto a slim margin in the Senate.

Over the longer term, investors will want to see more clarity from Capitol Hill about taxes and the costs of health care and financial regulatory reform bills that passed through Congress earlier this year.

[Associated Press; By STEPHEN BERNARD]

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