Stocks head for higher open ahead of Fed decision

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U.S. stocks headed for a higher openWednesday as investors awaited the Federal Reserve's decision oninterest rates.
Though data is due later in the morning on new home sales anddomestic oil inventories, investors will likely remain focused onthe Fed decision and accompanying comments from policymakers aboutthe economy and the threat of inflation.
A Commerce Department report that orders for big-ticketmanufactured items were essentially flat in May had little effecton stock futures. The innocuous reading left Wall Street able tokeep its attention on the central bank's next move.
Wall Street expects the Fed will stand pat on rates after cuttingthem quickly earlier this year, and to signal it could startraising rates again. But most market watchers contend the centralbank is hesitant to begin hiking rates now, even with risingprices, because an increase could hobble the economy.
At its last meeting, in April, the Fed lowered rates by a quarterpoint, leaving the federal funds rate at 2 percent. When thecentral bank began its campaign to inject the economy with cheapermoney in September the funds rate, which banks charge each otherfor overnight loans, stood at 5.25 percent. Policymakers wereworried that tightening credit over fears souring mortgage debtwould destabilize the economy.
The Fed's decision is due at 2:15 p.m. EDT. Before then, investorsexpect to receive figures on May orders for durable goods and salesof new homes for May. The government is also expected to reportweekly oil inventory figures, which could affect oil prices.
Dow Jones industrial average futures rose 34, or 0.29 percent, to11,847. Standard & Poor's 500 index futures rose 7.30, or 0.55percent, to 1,322.80, and Nasdaq 100 index futures advanced 15.25,or 0.80 percent, to 1,926.75.
Bond prices fell. The yield on the benchmark 10-year Treasury note,which moves opposite its price, rose to 4.13 percent from 4.10percent late Tuesday. The dollar was higher against other majorcurrencies, while gold prices fell.
Light, sweet crude slipped 12 cents to $136.88 in premarketelectronic trading on the New York Mercantile Exchange.
The run-up in oil has weighed on the stock market. The Fed'sloosening of interest rates to help the economy has also weakenedthe dollar and helped push prices for oil and other commoditieshigher. Wall Street's pullback amid concerns about inflation andits effect on the economy has left stocks down 10 percent for theyear and at their lowest levels since mid-March.
The rate hikes have also left other markets more attractive tocurrency investors than the U.S. In Europe, where higher interestrates offer better returns, European Central Bank PresidentJean-Claude Trichet said Wednesday he hasn't indicated thatinvestors should expect a series of interest rate hikes in thecoming months. While the ECB is expected to raise rates at its July3 meeting, he said he wouldn't "precommit" to rate hikes beyondthat.
The Commerce Department said orders for durable goods — whichinclude aircraft and machinery but also consumer items like cars,refrigerators and computers — were essentially unchanged inMay, as economists had expected. The report indicates that ordersfor aircraft and computers offset weakness elsewhere.
In corporate news, Barclays PLC cheered investors by announcingplans to raise $8.85 billion by issuing shares. The investmentswill come from the Middle East and Asia and will help the bankimprove its financial position following losses in the U.S.mortgage market.
Darden Restaurants, the operator of the Olive Garden and RedLobster chains, said it expects earnings to grow by 14 to 15percent in 2009. The company said it swung to a profit from a lossin its fiscal fourth quarter following strong sales at the OliveGarden.
General Mills Inc. said costs related to hedging commoditieslowered its fiscal fourth-quarter profit by 17 percent. But thecompany cited strong sales of yogurt, cookie mixes and Cheerios forpushing revenue above Wall Street's expectations.
Rockwell Automation Inc., which makes industrial parts, warned thatit expects to fall short of its full-year earnings forecast becauseof slower-than-expected growth in the U.S. and Europe.
Ford Motor Co.'s Volvo division said it handed layoff notices to1,200 workers in Sweden following a $151 million loss in the firstquarter amid slumping U.S. sales.
Overseas, Japan's Nikkei stock average slipped 0.14 percent. Inafternoon trading, Britain's FTSE 100 rose 0.36 percent, Germany'sDAX index added 0.42 percent, and France's CAC-40 was rose 0.93percent.