Stock Futures Edge Higher; Traders Eye Fed Decision

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U.S. stock-index futures rose modestly on Wednesday as traders waited to see if the Federal Reserve will unleash new measures to stimulate the struggling U.S. economy.

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Today's Markets

As of 7:46 a.m. ET, Dow Jones Industrial Average futures rose 21 points to 12784, S&P 500 futures gained 2.8 points to 1353 and Nasdaq 100 futures climbed 7.8 points to 2620.

Officials on the Federal Open Market Committee that is concluding its two-day meeting on the day were being confronted with a stream of gloomy data. The world's biggest economy added a paltry 69,000 jobs in May on the heels of an also tepid 77,000 the month before. That compares to a considerably more robust 275,000 in the first month of the year. At the same time, the economy grew at an annualized pace of 1.9% in the first quarter, down sharply from 3% in the final quarter of 2011.

The central bank is already pushing hard on the accelerator. The federal funds rate, which is the Fed's main monetary policy tool, is already at an exceptionally low target range between 0% and 0.25%, where it has sat since the financial crisis in 2008. It has also run two quantitative easing programs in which it bought certain assets and "operation twist" in which it extended the maturity of its balance sheet.

Operation Twist is set to come to an end in June, and some economists say the Fed may choose to extend the program to continue putting downward pressure on long-term interest rates. There are also analysts that think it is possible that the central bank will unveil a fresh quantitative easing program.

Fed Chairman Ben Bernanke is also set to hold a press conference following the decision in which he will discuss the central bank's monetary policy and economic projections.

"Recent statements by senior officials, including ... Bernanke, suggest that [the Fed thinks] current economic conditions likely do not warrant additional policy action," analysts at Nomura wrote in a note to clients.

"Nevertheless, risks to the U.S. outlook have increased markedly and the FOMC may be reluctant to disappoint markets that seem to be anticipating additional accommodation."

On the European front, Greece's New Democracy party was on track to forge a coalition government within the next day, according to multiple news reports. Analysts say that would dramatically reduce the risk of a Greek default and exit from the eurozone as some had feared.

The yield on Spain and Italy's 10-year bonds, which have been closely watched recently, both fell markedly as market participants moved into risky assets on Tuesday. Spain's yield is now below 7% and Italy's is below 6%, both still painful, but improved from earlier in the week.

Commodities markets were little changed. The benchmark crude oil contract traded in New York advanced by 31 cents, or 0.37%, to $84.34 a barrel. Wholesale New York Harbor Gasoline fell 0.17% to $2.637 a gallon.

In metals, gold dipped $10.20, or 0.62%, to $1,613 a troy ounce.

Foreign Markets

The Euro Stoxx 50 rose 0.01% to 2198, the English FTSE 100 gained 0.47% to 5613 and the German DAX edged higher by 0.15% to 6373.

In Asia, the Japanese Nikkei 225 rallied 1.1% to 8752 and the Chinese Hang Seng climbed 0.53% to 19519.