Stock Futures Flat Ahead of Fed Decision

NEW YORK (TheStreet) -- U.S. stock futures were ticking higher Wednesday as investors awaited the outcome of the latest Federal Reserve meeting.

Futures for the Dow Jones Industrial Average were rising by 16 points, or 14.7 points above fair value, at 12,778. Futures for the S&P 500 were up by 1.6 points, or 0.8 points above fair value, at 1352, and futures for the Nasdaq 100 were up 7 points, or 4.6 points above fair value, at 2620.

The major U.S. equity indices finished sharply higher on Tuesday, with the S&P 500 soaring to a one-month high, as risk-tolerant investors bet that additional fiscal stimulus is forthcoming from the Fed.

"The Fed offers a moment of economic sanity with its rate decision," said Paul Donovan, global economist at UBS, ahead of the conclusion of the Fed's two-day meeting. "The strength of broad money supply, Beige Book credit comments and overall activity argue against further quantitative measures. There is a small risk of a sterilised (so definitively not quantitative policy) operation Twist."

"If the Fed does nothing, but hints (either in the statement or via comments made by Bernanke) that further action may come as soon as the August 1, 2012 FOMC meeting, the markets would still likely be disappointed," said John Canally, economist for LPL Financial. "The markets' focus then would shift to Bernanke's press conference and back to the Fed's new economic forecast, as participants try to gauge the timing of the next round of stimulus."

After the two-day Federal Open Market Committee meeting, the Federal Reserve will post its statement at 12:30 p.m. EDT Wednesday, followed by the outlook of policymakers on the Fed funds rate and economy at 2 p.m. Fed Chairman Ben Bernanke is expected to address the press at 2:15 p.m.

Asian markets settled higher in anticipation of the outcome of the Fed meeting. Hong Kong's Hang Seng index settled up 0.53% and Japan's Nikkei average closed higher by 1.11%.

Meanwhile the FTSE in London was up by 0.56% and the DAX in Germany was up 0.31%, with the euro gaining a bit of traction.