As Turkey Gains Fade, Focus Turns to Fed

Stock futures trimmed back on a stronger lead triggered by an aggressive Turkish rate hike, as the effects of the rise appeared to dim on Wednesday. Investors were turning their focus to the outcome of a Federal Reserve meeting later.

Boeing Inc. and Dow Chemical Co. are tapped to report ahead of the bell, while Facebook Inc. reports after the close. Shares of Yahoo Inc. could get pressured premarket after earnings disappointed Wall Street.

After a gain of some 83 points earlier, futures for the Dow industrials pulled back to a rise of 10 points to 15,886. Those for the S&P 500 index were up under a point to 1,789, while futures for the Nasdaq-100 index rose 7.25 points to 3,508.25.

The corporate world will grab the early spotlight, with Boeing expected to post fourth-quarter earnings of $1.57 a share. Dow Chemical is seen posting fourth-quarter profit of 43 cents a share.

Shares of Yahoo were coming under premarket pressure after its results disappointed late Tuesday, prompting concerns that Chief Executive Officer Marissa Mayer still doesn't have a grip on turning the Internet services company around.

Facebook will report results after the close and is forecast to post fourth-quarter earnings of 27 cents a share.

Electronic Arts Inc. may also see pressure premarket, after slipping late Tuesday on news the company cut its sales outlook on sliding sales of games for aging consoles.

VMware Inc. could be another loser, after the virtualization software maker's shares fell late Tuesday on the heels of its results.

News that Turkey raised its overnight lending rate to 12%, more than most had expected, shored up the Turkish lira against the dollar and boosted global stocks, with Asian shares jumping in response and Europe stocks rising across the board.

"Whether other emerging markets follow suit or the optimism can survive another expected $10 billion of tapering tonight is another question, but for now fears that an emerging-market collapse would drag western economies down seem to have subsided," said Jonathan Sudaria, a dealer at London Capital Group, in a note.

However, some pressure was beginning to seep back into the Turkish lira, which came off its best levels against the dollar. U.S. stock futures responded to this pullback by easing up on gains that had been stronger going into the European session.

Much focus will fall on the Fed, which at 2 p.m. EST could announce a decision to trim its bond-buying program again. Investors are also watching to see if the Fed axes its 6.5% unemployment threshold for lifting interest rates.

Keith McCullough, chief executive officer of Hedgeye Risk Management, said that after a big miss for U.S. home sales and a slowdown of durable goods data Tuesday, sentiment was beginning to reverse somewhat, though it wasn't extremely bearish. He said the risk range for the S&P 500 is still signaling lower highs of 1,771 to 1,819.

"Turkey is the tree -- U.S. growth slowing is the new forest. New-home sales and new orders were nasty slowdowns," said McCullough.

Wall Street finished Tuesday's session with the best gains in two weeks. The S&P 500 closed up 0.6% to 1,792.50, and the Dow industrials ended the session up 0.5% to 15,928.56, breaking a five-day skid.

Investors may also be reflecting on Tuesday's State of the Union address from President Barack Obama, who said he would take aggressive measures to boost the U.S. economy. He said he would bypass Congress, if necessary, to create a new retirement-savings program and raise the minimum wage for all workers.

In other markets, gold edged higher and oil was pulling back, though natural gas remained firmer.