Wall St to open little changed as Fed statement looms

By Rodrigo Campos

NEW YORK (Reuters) - U.S. stocks were set to open little changed on Wednesday, holding on to gains over the last two days, ahead of a highly anticipated Federal Reserve statement and news conference.

The Fed will release a policy statement at 2:00 p.m. EDT (1800 GMT), which will be followed soon after by a news briefing with Chairman Ben Bernanke.

"The early morning action is not surprising given the fact that we've had two days of position jockeying ahead of the FOMC announcement," said Andre Bakhos, director of market analytics at Lek Securities in New York.

The advance this week so far suggested investors expect reassurances of continued economic support from the U.S. central bank. The equity market had been roiled recently by indications that the Fed's asset purchases would be scaled back earlier than anticipated.

 

Even as volatility has spiked in the wake of Bernanke's comments to Congress May 22, which had triggered investors' angst over a winding-down of quantitative easing, equity markets have mostly traded sideways. The S&P 500 is now 1 percent below its record closing high set on May 21.

"A well perceived statement, and the upside momentum will continue," Bakhos said. "However, a statement which creates concern with Fed policy may prove to be a chance for the market to reverse its recent gains."

September futures for the S&P 500 were flat in terms of fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 6 points, and Nasdaq 100 futures gained 4 points.

Fed policymakers will likely announce that they will keep buying bonds at a monthly pace of $85 billion, while keeping their options open to scale back the program later this year if the U.S. labor market continues to improve.

Shares of Adobe Systems Inc rose 7.9 percent to $46.80 in premarket trading a day after the maker of Photoshop and Acrobat software reported a higher-than-expected adjusted quarterly profit and said demand rose for Creative Cloud, the subscription-based version of its flagship software package.

FedEx Corp posted a larger than expected quarterly profit as its ground shipment business did well, and the company saw benefits from lower jet fuel prices. Its shares were down 0.7 percent at $98.75 in premarket trading.

Other S&P 500 companies scheduled to report earnings on Wednesday include Jabil Circuit Inc , Micron Technology Inc and Red Hat Inc .

Japan's SoftBank <9984.T> cleared a major hurdle in its attempt to buy U.S. wireless provider Sprint Nextel , as rival bidder Dish Network declined to make a new offer after SoftBank sweetened its own bid last week. Sprint shares fell 3.1 percent to $7.09 in premarket trading.

(Editing by Bernadette Baum)