Futures tick up as 2nd day of Fed meeting begins
While the Fed announcement is dominating the news, concern mounts over the US debt and budget debates in Washington.
As investors wait to hear from the U.S. Federal Reserve about whether the bank is going to cut its $85 billion per month stimulus plan, many are becoming more concerned about the looming U.S. debt ceiling debate in Washington.
Months of anticipation about the Fed cutting its stimulus spending by $10 billion to $15 billion will likely keep markets' volatility to a minimum if the bank does announce a taper.
However, the U.S. debt ceiling decision has been quietly approaching in the background and could create a real problem in October. Many see the debt ceiling being more detrimental to markets than the Fed's tapering if Congress doesn't pass legislation to raise the ceiling over the next few weeks.
In other news around the markets:
Cyprus President Nicos Anastasiades told reporters that his country will lift capital controls on January 14, almost one year after they were implemented. The tiny island nation was the first eurozone member to use capital controls to keep investors from pulling their money out of the nation and collapsing its financial system.
Apple (AAPL) has come under fire for its high pricing even as its sales growth wanes. The company is refusing to pass the falling cost of flash-memory chips on to consumers, making the cost of an iPhone much higher than its competition. The company's stock has fallen 8% since it revealed its latest iPhone models, as most see even the low cost iPhone 5c as priced too high.
Despite mounting evidence that the Syrian government was behind the August 21 chemical weapons attack, Russia is backing Syrian President Bashar al-Assad's claims that rebels are responsible for the attack. Russia's stance on the issue is in stark contrast to that of the U.S. and has raised questions about Russia's commitment to destroying Syria's chemical weapons supply. Most believe that if Russia doesn't help enforce the UN's disarmament plan, the U.S. may renew its push for military force.
Asian markets were mixed as the Federal Reserve meeting neared its end. The Japanese NIKKEI was up 1.35%, China's Shanghai composite gained 0.29%, and the Shenzhen composite was up 0.49%. The South Korean KOSPI lost 0.39%, and the Hang Seng index was down 0.25%.
European markets were quiet on Wednesday morning. The UK's FTSE was flat with just 0.03% gains, and the STOXX 600 was up 0.13%. The DAX gained 0.16%, and both the Spanish IBEX and Italy's MIB were up 0.35%.
Brent futures for November delivery rose 0.13%, and WTI futures gained 1.02%. Precious metals were down; gold lost 0.21%, and silver was down 0.06%. Industrial metals fared better with copper up 0.54% and tin up 0.31%.
The euro to dollar ratio remained flat ahead of the Fed taper, but the pound gained 0.16% against the greenback. The yen rose 0.23% against the dollar, and the rupee gained 0.37% against the dollar.
Notable companies that reported earnings on Tuesday included:
Adobe Systems (ADBE) reported third quarter earnings per share of $0.32 on revenue of $995.10 million, compared to last year's earnings per share of $0.58 on revenue of $1.08 billion.
FactSet Research Systems (FDS) reported fourth quarter earnings per share of $1.20 on revenue of $219.98 million, compared to last year's earnings per share of $1.08 on revenue of $218.98.
Stocks moving in the premarket included:
AT&T (T) gained 0.95% in premarket trade as it expanded its Aio Wireless no-contract plans across the U.S.
Consolidated Edison (ED) has been climbing since Friday and gained 0.65% in premarket trade.
Kellogg (K) gained 0.23% in premarket trade after the company was named one of the top companies for working mothers by Working Mother magazine.
Walt Disney (DIS) lost 0.12% in premarket trade after the company announced that it is planning to repurchase between $6 billion and $8 billion worth of shares in fiscal year 2014.
Notable companies expected to report earnings on Wednesday include:
Oracle (ORCL) is expected to report earnings per share of $0.56 on revenue of $8.48 billion, compared to last year's earnings per share of $0.53 on revenue of $8.21 billion.
FedEx (FDX) is expected to report earnings per share of $1.52 on revenue of $11.00 billion, compared to last year's earnings per share of $1.45 on revenue of $10.79 billion.
General Mills (GIS) is expected to report earnings per share of $0.70 on revenue of $4.30 billion, compared to last year's earnings per share of $0.66 on revenue of $4.05 billion.
On Wednesday's economic calendar, the U.S. FOMC statement and rate decision will dominate the news. Also notable will be U.S. housing starts and building permits, the Bank of England's MCP meeting minutes and the Japanese trade balance.
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Fed keeps important 'considerable time' language in reference to short-term interest rates, but dissents and dots leave doubts.
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