Wall Street set to open higher on Fed optimism; FedEx results shine

(Reuters) - Wall Street's main indexes were set to open higher on Wednesday as investors hoped for a pledge by the Federal Reserve to keep interest rates low for a prolonged period, with upbeat quarterly results from FedEx also boosting sentiment.

The central bank's two-day meeting is its first under a newly adopted framework that promises to shoot for inflation above 2% to make up for periods where it is running below that target.

The Federal Open Market Committee will release its policy statement and economic projections at 2 p.m. ET (1800 GMT), followed by Fed Chair Jerome Powell's virtual news briefing half an hour later.

"I don't think the Fed is concerned about supporting the stock market, but they are concerned about supporting the economy with a very favorable rate policy for a very extended period of time," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

"But the Fed policy is probably the biggest driving force behind the continued strength of the stock market."

Wall Street's main indexes have bounced after a tech-driven slump last week that pushed the Nasdaq Composite index <.IXIC> into correction territory in just three sessions.

After declining for two weeks in a row, the benchmark S&P 500 <.SPX> has rebounded 1.8% in the past two sessions, with defensive sectors including real estate <.SPLRCR> and utilities <.SPLRCU> among the biggest gainers.

At 8:09 a.m. ET, Dow e-minis <1YMcv1> were up 141 points, or 0.5%. S&P 500 e-minis <EScv1> were up 18 points, or 0.53% and Nasdaq 100 e-minis <NQcv1> were up 35.25 points, or 0.31%.

Delivery firm FedEx Corp <FDX.N> jumped 9.2% in premarket trading after reporting a bigger-than-expected quarterly profit, helped in part by price hikes and lower fuel costs.

Shares in rival United Parcel Service Inc <UPS.N> gained 4.1%.

Boeing Co <BA.N> fell 1% after a U.S. House panel concluded that two 737 MAX crashes were the "horrific culmination" of failures by the planemaker and the Federal Aviation Administration.

Apple Inc <AAPL.O> dipped 0.1%, after ending the previous session marginally higher, as it rolled out a new virtual fitness service and a bundle of all its subscriptions, Apple One.

Other tech-related stocks including Alphabet Inc <GOOGL.O>, Amazon.com Inc <AMZN.O> and Microsoft Corp <MSFT.O> gained between 0.7% and 0.8%.

Eastman Kodak Co <KODK.N> jumped 42.5% after a law firm hired by the photography equipment maker said Chief Executive Officer Jim Continenza's securities transactions around the time the company learned it could receive a $765 million government loan did not violate internal policies.

(Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Shounak Dasgupta)

09/16/2020 12:46

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