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Stock Futures Rise as Investors Await Fed's Next Move

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NEW YORK ( TheStreet) -- U.S. stock futures were pointing to a higher open on Wall Street Monday as investors digested a better-than-expected national manufacturing report, and awaited a real estate report and the upcoming Federal Reserve policy announcement.

Futures for the S&P 500 were gaining 12.5 points, or 11.37 points above fair value, to 1,631.

Smithfield Foods shares were rising 2.44% to $33.60 in premarket trading. Activist investment fund Starboard Value is pressuring Smithfield Foods to explore a breakup rather than follow through with its planned $4.7 billion takeover by Chinese meat producer Shuanghui International, according to a letter reviewed by The Wall Street Journal.

Starboard, in a letter to the Smithfield board that is expected to be delivered by Monday, said it has taken a 5.7% stake in pork processor Smithfield and urges it to consider splitting up. Starboard's stake makes the fund one of Smithfield's larger investors.

Netflix was tacking on more than 4% to $222.75 and Dreamworks Animation was rising 0.4% to $22.90 after Netflix announced its largest original content deal ever, with DreamWorks Animation. The agreement will provide viewers with more than 300 hours of new programming, with new shows inspired by characters from DreamWorks Animation's hit franchises and upcoming feature films, as well as its Classic Media library.

Facebook shares were rising more than 1% to $23.88 as speculation mounted on what the social media company could announce during a Friday press event. The invite said little more than "a small team has been working on a big idea. Join us for coffee and learn about a new product."

Futures for the Dow Jones Industrial Average were soaring 110 points, or 107.82 points above fair value, to 15,098. Futures for the Nasdaq were rising 26.75 points, or 26.89 points above fair value, to 2,963.75.

The New York Federal Reserve reported Monday that its June Empire State manufacturing survey indicated that conditions for New York manufacturers improved modestly this month. The general business conditions index, the most comprehensive of the survey's measures, rose nine points to 7.8, which was above the unchanged figure expected by economists. Nevertheless, most other indicators in the survey fell.

At 10 a.m. EDT, the National Association of Home Builders is expected by economists to report that it housing market index rose to 45 in June from 44 in May.

The Fed's two-day meeting kicks off Tuesday, with its policy announcement, economic projections, and Fed chairman Ben Bernanke's press conference taking place on Wednesday.

Michala Marcussen, global head of economics at Societe Generale in London, wrote in a note that recent economic data suggests the Fed will unlikely arrive at any significant new conclusions about the U.S. economy recovery.

Her hope is that Bernanke's press conference will offer more insight on stimulus tapering criteria and how it will be conducted.