By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- Stock futures drifted south 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) fell 4 points to
1,976.10, while those for the Dow industrials (DJZ4) eased 9 points
to 16,927. Futures for the Nasdaq-100 index (NDZ4) fell 12 points
or 0.3%, to 4,082, as Facebook Inc.(FB) skidded 8% 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 major item on the
economic calendar for Wednesday.
Techs 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
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), Ralph Lauren Corp. (RL) are
still due to report.
U.S. Steel Corp.(X) shares rose 10% in premarket after posting a
narrower loss and higher revenue late Tuesday.
InvenSense Inc.(INVN) shares slid 26% 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 14% 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) rose over 1% 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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