Futures edge higher as Fed's move digested; Apple gains

[September 27, 2018]  By Amy Caren Daniel

(Reuters) - U.S. stock index futures edged higher on Thursday on the back of high-flying companies such as Apple and Amazon, while investors assessed the Federal Reserve's policy statement.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 19, 2018. REUTERS/Brendan McDermid

The Fed, as expected, raised interest rates on Wednesday, and left its monetary policy outlook for the coming years largely unchanged amid steady economic growth and a strong job market, adding it did not expect any surprises on inflation.

Although the central bank's statement marked the end of the era of "accommodative" monetary policy, Fed Chairman Jerome Powell downplayed the significance of the change saying the policy was still generally accommodative.

"The indices are pointing to higher opening after the Fed clearly indicated that more rates hikes are on their way," Peter Cardillo, chief market economist at Spartan Capital Securities in New York, wrote in a note.

"The action taken by the Fed was no surprise, as the era of an accommodative policy moves rates to normality."

Shares of Apple <AAPL.O> rose 1.1 percent in premarket trading after JP Morgan started coverage with an "overweight" rating, citing the iPhone maker's quicker-than-expected move to a services business.

Amazon.com <AMZN.O> rose 0.7 percent after the online retailer said it was opening a general store in New York City that will sell toys and household goods in its latest brick-and-mortar trial.

The other so-called FAANG stocks - Facebook <FB.O>, Netflix <NFLX.O> and Google-parent Alphabet <GOOGL.O> - were also trading higher.

At 7:20 a.m. ET, Dow e-minis <1YMc1> were up 4 points, or 0.02 percent. S&P 500 e-minis <ESc1> were up 2.25 points, or 0.08 percent and Nasdaq 100 e-minis <NQc1> were up 17.75 points, or 0.23 percent.

Accenture <ACN.N> shares were swinging between slight gains and losses as the consulting and outsourcing services company's quarterly results beat analysts' estimates, but its full-year profit fell slightly short.

Geron <GERN.O> plunged 63.4 percent after Johnson & Johnson's <JNJ.N> Janssen ended a collaboration to develop a blood disorder drug.

At 8.30 a.m. ET, several sets of U.S. economic data are expected. This includes the final number for U.S. economic growth, which is expected to show a 4.2 percent annualized rate in the second quarter.

The Commerce Department report is expected to show durable goods orders rebounding 2.0 percent in August, after slipping 1.7 percent in the month before.

Initial claims for state unemployment benefits are forecast to have increased by 9,000 to a seasonally adjusted level of 210,000 for the week ended Sept. 22.

(Reporting by Amy Caren Daniel in Bengaluru; Editing by Anil D'Silva)

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