By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- Stock futures largely stuck to the flat
line ahead of a decision from the Federal Open Market Committee
that is expected to spell the end of its bond-buying program,
though a slide in Facebook shares was putting early pressure on
other technology stocks.
Futures for the S&P 500 index (SPZ4) fell 2.7 points to
1,977.40, while those for the Dow industrials (DJZ4) eased 3 points
to 16,933. Futures for the Nasdaq-100 index (NDZ4) fell 9.5 points
or 0.2%, to 4,084.50, as Facebook Inc.(FB) skidded 7% on a warning
about higher costs.
Stocks rallied Tuesday on hopes for a market-pleasing outcome
from the Fed meeting. 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 point rise.
Officials are expected to announce the end of the Fed's 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 item on the economic
calendar for Wednesday.
Techs under pressure: Tech stocks weren't shaping up for a
repeat of Tuesday's gains, thanks in part to that Facebook warning,
which overshadowed better-than-expected earnings. While 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 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, Goodyear Tire
& Rubber Co. (GT), Hershey Co.(HSY), Ralph Lauren Corp. (RL)
are due to report. WellPoint Inc. (WLP) posted adjusted earnings
that beat forecasts, but shares weren't moving in premarket.
U.S. Steel Corp.(X) shares rose 10% in premarket after posting a
narrower loss and higher revenue late Tuesday.
InvenSense Inc. (INVN) shares were off 22% 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 10% premarket after one
of the company's rockets exploded soon after liftoff. 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) could see more gains, after
second-quarter results topped Wall Street forecasts and the
videogame publisher lifted 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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