U.S. stock futures higher ahead of Fed decision

By SARA LEPRO

AP Business Writer

NEW YORK (AP) — Stock futures are indicating a higher opening Wednesday on Wall Street as investors await the Federal Reserve’s latest assessment of the economy.

Futures extended early gains after a private group’s report on employment showed some modest improvement in the labor market. The ADP National Employment Report said 203,000 private sector jobs were lost in October, down from the 227,000 jobs lost in September. It was the seventh straight month of declining job losses.

Traders are anxious to see whether there will be a significant drop in the number of jobs cut nationwide during October when the Labor Department issues its employment report on Friday.

Later Wednesday, the Institute for Supply Management will give an update on activity in the service sector. Growth in the service industry would add significant jobs to the economy.

The market’s main focus Wednesday is the Federal Reserve and what it has to say about the economy when it wraps up a two-day meeting on interest rates. Policy makers aren’t expected to raise the Fed’s benchmark interest rate from a level of near zero, hoping to keep an economic turnaround going by keeping borrowing rates low. But investors will be looking for the Fed’s view of the 3.5 percent growth in the economy during the third quarter and whether such growth will be sustainable. The market would also like more guidance on how the Fed plans to withdraw its stimulus programs without threatening the recovery.

Investors have grown fearful that the economic rebound they’ve been betting on over the past eight months will be fleeting, considering that job losses remain high and consumers still aren’t spending freely. Stocks have zigzagged over the past few weeks amid the heightened uncertainty.

Ahead of the market’s open, Dow Jones industrial average futures rose 71, or 0.7 percent, to 9,788. Standard & Poor’s 500 index futures rose 7.40, or 0.7 percent, to 1,049.10, while Nasdaq 100 index futures gained 8.00, or 0.5 percent, to 1,683.50.

Stocks ended mostly higher Tuesday, after swinging between gains and losses, as an increase in commodity prices and corporate dealmaking abated some of investors concerns about the economy. The Dow Jones industrial average slipped 17 points, after rising 77 on Monday, while broader indexes rose modestly.

On Wednesday, investors are looking for the ISM service index to edge up to 51.5 from 50.9 in September. A reading above 50 indicates growth. A reading of 51.5 would be the strongest since April 2008.

The latest earnings reports were mostly upbeat. Comcast Corp. reported a 22 percent increase in its third-quarter earnings. The nation’s largest cable TV operator also said it sees signs the economy is improving.

Media conglomerate Time Warner Inc. reported a 38 percent drop in third-quarter profit, but the results beat expectations. The company also boosted its full-year earnings forecast.

Pulte Homes Inc.’s third-quarter loss widened, but the homebuilder said it has continued to see stabilization in the housing market.

In other trading, bond prices fell slightly. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.52 percent from 3.47 percent late Tuesday.

The dollar slipped against other major currencies, helping to push commodities prices higher. Gold surged to a new high of $1,096.20 an ounce, while oil prices added $1.04 to $80.64 in premarket trading on the New York Mercantile Exchange.

Overseas, Japan’s Nikkei stock average rose 0.4 percent, while Hong Kong’s Hang Seng index jumped 1.8 percent. In afternoon trading, Britain’s FTSE 100 was up 0.8 percent, Germany’s DAX index gained 1.2 percent, and France’s CAC-40 rose 1.6 percent.