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Fed Chatter Sparks Futures Gain as Stocks Eye New Highs

Tickers in this article: AER AIG ^DJI ^GSPC ^IXIC

NEW YORK (TheStreet) -- It's all about the Federal Reserve this week.

U.S. stock futures were catching a wave Monday as investors attempt to answer the critical question for not only equities but the U.S. economy: Will the Fed reduce its $85 billion-a-month bond-buying stimulus program at this week's central bank policy meeting, or maintain the current level?

  • At 9:04 a.m. in New York, S&P 500 futures were rising 10.25 points, or 11.03 points above fair value, to 1,778.75, Dow Jones Industrial Average futures were increasing 91 points, or 107.64 points above fair value, to 15,792, Nasdaq futures were adding 18.2 points, or 22.5 points above fair value, to 3,471.5.
  • The Federal Reserve's policy meeting begins Tuesday and ends Wednesday with an announcement from the central bank, forecasts and a press conference. There is little consensus on when the Fed might begin reducing economic stimulus for the U.S. economy -- bets have been placed on this month following a drop in the jobless rate to 7%.
  • "Fed officials face a more difficult decision at their meeting (this) week, as the employment and growth data have picked up since the October meeting," said Goldman Sachs' Jan Hatzius. "But our central forecast for the first tapering move remains March, with January possible as well."
  • November industrial production is one of the more widely watched reports Monday. It's expected to increase 0.5% after a 0.1% fall in October. The industrial production and capacity utilization report will be released at 9:15 a.m. EST.
  • The December Empire State Manufacturing report rose less than expected to 1. Third-quarter nonfarm labor productivity increased 3%. Unit labor costs fell 1.4%. The Markit flash PMI manufacturing index will be released at 8:58 a.m.
  • Sprint shares were up over 4% to $8.79 as it reportedly prepares a takeover bid for T-Mobile . American International Group popped 1.85% to $50.65 amid advanced talks to sell its jet-leasing business to AerCap Holdings for $3 billion in cash and a minority stake in the Netherlands-based company, the Journal reported. AerCap surged 36.38% to $34.

-- Written by Andrea Tse in New York.

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