* Fed to release statement about 2:15 p.m. EDT (1815 GMT)
* Futures up: S&P 1.1 pts, Dow 12 pts and Nasdaq 2 pts
* For a TAKE-A-LOOK on U.S. midterm elections []
* For up-to-the-minute market news see []
(Updates prices, adds quote, byline)
By Angela Moon
NEW YORK, Nov 3 (Reuters) - U.S. stock index futures edged
higher on Wednesday after Republicans won control of the U.S.
House and strengthened their ranks in the Senate and ahead of
an expected Federal Reserve announcement on monetary easing.
The Fed statement is due at about 2:15 p.m. EDT (1815 GMT)
and is widely expected to give details on the extent and length
of a program of asset purchases of at least $500 billion,
effectively printing money to buy bonds and lowering borrowing
costs in a bid to stimulate the economy.
Futures rose to their highs overnight as voters swept
Democrats from power in the House of Representatives and
increased the number of Senate Republicans in a sharp rebuke to
U.S. President Barack Obama. But the gains in futures melted as
investors shifted their focus to the Fed. For details, see
[]
"We are currently trading in line with expected news, but
that may well become a different situation come this afternoon
with the Fed announcement. In the short term, we are up 14
percent from September, with just two significant down days. It
would take much to upset this market and see an easy 3-5
percent pullback if the Fed disappoints," said Arthur Hogan,
chief market analyst at Jefferies and Co in Boston.
The Republican victory was seen as creating a more
business-friendly environment as voters punished Democrats over
high unemployment and a sluggish economic recovery.
[]
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic on the election results:
http://link.reuters.com/wav53q
For a special report on the Fed's quantitative easing:
http://link.reuters.com/pyb23q
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
S&P 500 futures <SPc1> rose 1.1 points and were above fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures <DJc1> gained 12
points, and Nasdaq 100 futures <NDc1> rose 2 points.
The S&P 500 index has jumped almost 14 percent since
September, and analysts said the election results had been
priced into the market, leaving stocks ripe for profit-taking.
World stocks hit a two-year top on Wednesday, while
emerging equities rose to their highest level since mid-2008 as
investors bet that the Fed's actions would support the global
economy.
A raft of data due later is expected to offer a reading on
the state of the economic recovery. The ADP Employment report
for October is due at 8:15 a.m. EDT (1215 GMT). Economists in a
Reuters survey expected that 20,000 jobs were added versus a
loss of 39,000 jobs in the previous month.
Factory orders and the ISM non-manufacturing PMI index for
October are both due at 10 a.m. EDT (1400 GMT). Economists
expect factory orders to increase of 1.6 percent versus a
decline of 0.5 percent last month and forecast an ISM reading
of 53.5 percent from a 53.2 percent in the previous month . For
details, see []
U.S. Treasuries extended gains in European trading as
traders anticipated the Fed resuming asset purchases after its
policy meeting. T-note futures <TYv1> rose by as much as 8/32
to a one-week high of 126-26/32.
The U.S. dollar eased 0.1 percent against a basket of
currencies <.DXY>. The dollar and the S&P 500 have established
a close inverse correlation in recent weeks. Their 30-day
correlation stands at -0.84, with -1 being a perfect inverse
correlation.
The CBOE Volatility Index <.VIX>, a favorite barometer of
investor fear, fell 1.2 percent on Tuesday after six sessions
of gains.
(Reporting by Angela Moon; editing by Jeffrey Benkoe)
