By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- Stock futures looked flat ahead of a
decision from the Federal Open Market Committee that is expected to
spell the end of its bond-buying program.
The likely end of the Fed's so-called quantitative easing, or
QE, and the slide in Facebook shares, are putting early pressure on
stocks.
Futures for the S&P 500 index (SPZ4) were off 2 points to
1,978.40, while those for the Dow industrials (DJZ4) ticked up 10
points to 16,946. Futures for the Nasdaq-100 index (NDZ4) fell 8.75
points to 4,085.25, as Facebook Inc.(FB) skidded 6.2% on a warning
about higher costs.
Stocks rallied Tuesday on signs that the U.S. consumers are
growing more confident, as well as the hope that the Fed, after its
meeting, will placate fears about rates being hiked anytime soon.
The Nasdaq Composite Index (RIXF) outperformed other main indexes
with a 1.75% gain, while the S&P 500 index (SPX) jumped 1.2%
and the Dow industrials (DJI) notched a triple-digit gain.
Federal Reserve officials are expected to announce the end of
the lengthy bond-buying program. Stocks have risen as traders have
gotten bullish in anticipation that the Fed will be dovish with its
forward guidance, said Jonathan Sudaria, dealer at London Capital
Group. And therein lies the risk.
"In exchange for pulling the plug, markets will need to get
something in return or they could throw another taper tantrum," he
said in a note. Read: Fed will hold market's hand as it ends
QE3
The wrap of the Fed meeting is the only major item on the
economic calendar for Wednesday.
Tech stocks under pressure: Tech stocks weren't shaping up for a
repeat of Tuesday's gains. In larger part, Facebook is to blame.
The social media giant issued a warning about increased expenses,
which overshadowed better-than-expected earnings. Although results
in the past year have been impressive and hard to beat, tougher
comparisons and higher spending are on investors' minds, said
Pacific Crest Securities' analyst Evan Wilson, in a note.
Facebook's premarket stock selloff weighing on tech-sector
tracker
Facebook Inc. joins Twitter Inc. (TWTR) in dealing with what's
been a tough week for some Internet stocks. Twitter fell nearly 10%
on Tuesday after the social-media company's results showed slowing
growth in new users and analysts downgraded the stock. Read:
Facebook user growth may be slowing too
More stocks to watch: Ahead of the opening bell, Hershey
Co.(HSY)(HSY) shares fell more than 3%, as the chocolate maker
missed profit expectations and cut its outlook. WellPoint Inc.(WLP)
posted adjusted earnings that beat forecasts, but shares weren't
moving in premarket.
Goodyear Tire & Rubber Co.(GT) stock ran up 10% in premarket
trade Wednesday, after the tire maker reported third-quarter profit
that was well above expectations.
Ralph Lauren Corp. (RL) fell 2% in premarket trade Wednesday,
after the apparel and accessories maker's better-than-expected
fiscal second-quarter earnings were offset by a sales miss and a
downbeat outlook for the current quarter.
U.S. Steel Corp. (X) shares rose 8.6% in premarket after posting
a narrower-than-expected loss and higher revenue late Tuesday.
InvenSense Inc.(INVN) shares slid 21% in premarket trading after
the micro-electro-mechnical systems designer posted second-quarter
results that fell short of market expectations. Pacific Crest
downgraded shares to sector perform from underperform.
Orbital Sciences(ORB) slumped more than 13% premarket after one
of the company's rockets exploded soon after lift off. On Sunday,
Orbital announced it was launching an Antares rocket with a Cygnus
logistics spacecraft to the International Space Station. Here's the
dramatic footage.
Electronic Arts Inc.(EA) rallied 4% after second-quarter results
topped Wall Street forecasts and the video-game publisher raised
its outlook. See Movers & Shakers for more on individual
stocks.
Other markets: European stocks rose slightly, while Asian
markets took a cue from Wall Street's strong gains on Tuesday and
powered ahead. Gold(GCZ4) and the dollar(DXY) were steady, while
oil(CLZ4) logged moderate gains.
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