Futures Climb; Traders See Dovish Fed Comments

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U.S. stock-index futures climbed Wednesday, bolstered by expectations the Federal Reserve will keep its foot firmly on the economic accelerator and hopes the situation in Cyprus will remain contained.

Today's Markets

As of 8:03 a.m. ET, Dow Jones Industrial Average futures rose 33 points to 14422, S&P 500 futures climbed 3.5 points to 1546 and Nasdaq 100 futures jumped 12.3 points to 2792.

Headlines from Europe have driven Wall Street higher and lower over the past two trading days. However, markets have only posted relatively mild losses even as the situation in Cyrpus remains murky. The country's parliament turned down a plan that would have financed $7.5 billion of a $13 billion international bailout with bank deposit levies.

That means Cyprus now needs to come up with a new way to kick in money for the plan, lest it risks a default and and a big blow to its banking system. Still, there are hopes among world trading desks that the situation will remain contained.

"In the glory days of the eurozone crisis a ‘no’ vote to a bailout plan would have provoked a major storm, but the small size of the bailout and the loose monetary policy environment means that most investors are happy to leave Cyprus on the back burner," Chris Beauchamp, a market analyst at IG in London wrote in an e-mail.

The focus is expected to shift to the Federal Reserve later in the day. The central bank releases its monetary policy statement at 2 p.m. ET, followed by a press conference by Chairman Ben Bernanke half an hour later. Analysts broadly expect the Fed to hold interest rates at record lows, and keep the pace of asset purchases steady.

"On net, we believe overall economic conditions are unlikely to inspire a change in policy at this meeting," analysts at Nomura wrote in a note to clients.

However, timing of the Fed's exit from quantitative easing has been key ever since minutes from the last meeting said some members were mulling "tapering" the program as the economy improves. The Fed balances its dual mandate of ensuring steadily low unemployment and keeping inflation under control in making its decisions. Over the past several years, inflation has been kept in check, so the Fed has been pushing hard to accelerate growth and push the unemployment rate down.

"The Fed would argue, and its time market participants believed them, that as long as inflation is low, the paramount concern is the unemployment rate," Dan Greenhaus, chief global strategist at BTIG, wrote in an email. "As such and in theory, as long as inflation and inflation expectations remain contained, the FOMC could ease policy indefinitely."

On the corporate front, FedEx (NYSE:FDX) revealed an adjusted fiscal third-quarter profit of $1.23 a share, significantly below estimates of $1.38 a share. Revenues of $11 billion beat Wall Street’s expectations of $10.85 billion. The global shipping giant’s full-year profit view of $6 to $6.20 a share missed forecasts of $6.31 a share.

Shares of BlackBerry (NASDAQ:BBRY) jumped on a report that Morgan Stanley upgraded the embattled smartphone maker to "overweight" from "underweight."

In commodities, oil and gasoline prices pushed higher. The benchmark U.S. crude oil contract climbed 69 cents, or 0.75%, to $92.85 a barrel. Wholesale New York Harbor gasoline rose 0.37% to $3.056 a gallon. Gold fell $3.60, or 0.23%, to $1,608 a troy ounce.

Foreign Markets

The Euro Stoxx 50 rose 0.69% to 2690, the English FTSE 100 fell 0.02% to 6441 and the German DAX climbed 0.43% to 7981.

In Asia, the Chinese Hang Seng rallied 1% to 22256. Markets in Japan were closed for the Vernal Equinox.