Stock futures rise modestly ahead of Fed meeting

Stock futures rose modestly Tuesday before the Federal Reserve concludes a meeting where it is expected to keep a key interest rate at historic lows.

A Commerce Department report that said construction of new homes fell less than expected last month had little effect on trading.

Overseas markets mostly rose. European markets gained after the 16 countries that share the euro agreed to help Greece with loans if the debt-burdened country needs it.

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Investors widely expect the Fed to hold its key interest rate near zero. However, as the economy improves the Fed will need to start increasing rates to fight expected inflation. That means investors will pore over the Fed’s statement after its meeting to see if there are any clues about when rates might change.

The Fed has repeatedly said inflation is not a near-term problem, and it plans to keep rates low for an “extended period.”

Any change in the language of the statement that indicates the Fed will raise rates sooner rather than later could spark a sell-off in the market.

Major stock indexes were narrowly mixed Monday as investors have taken a cautious approach ahead of the Fed’s meeting.

Ahead of the opening bell Tuesday, Dow Jones industrial average futures rose 11, or 0.1 percent, to 10,587. Standard & Poor’s 500 index futures rose 2.00, or 0.2 percent, to 1,147.70, while Nasdaq 100 index futures rose 5.00, or 0.3 percent, to 1,922.00.

The Commerce Department said construction of new homes fell 5.9 percent to a seasonally adjusted annual rate of 575,000 units. That was slightly better than the rate of 570,000 units economists polled by Thomson Reuters predicted.

January activity was revised higher to a pace of 622,000 units, which was the best showing in 14 months.

Applications for new permits fell to an annual rate of 612,000. Economists had forecast a drop to 610,000. Applications are considered a good sign of future activity.

A collapse in the housing market helped push the economy into recession. A recovery has been slow and bumpy, which has helped to keep a broader economic recovery in check.

Bond prices dipped ahead of the Fed’s meeting, pushing interest rates higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.71 percent from 3.70 percent late Monday.

The dollar fell against other major currencies, while gold prices rose.

Overseas, Japan‘s Nikkei stock average fell 0.3 percent. Britain’s FTSE 100 rose 0.2 percent, Germany’s DAX index gained 0.7 percent, and France’s CAC-40 rose 0.7 percent.

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