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CNBC ON DIGG

Futures Fall Ahead of Fed; Intel, UBS Down

Published: Tuesday, 3 Nov 2009 | 7:39 AM ET

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By: CNBC.com

With the markets in volatility mode, investors will likely be focusing on the Federal Reserve Tuesday, even though the two-day Federal Open Market Committee meeting that begins this afternoon won't conclude until Wednesday.

Dow 30: Extra-Hour Quotes

Pre-Markets/Futures Data

At approximately 2:15 pm New York time Wednesday, we'll get the latest statement from policymakers, and investors are watching for any change in the "for some time to come" language the Fed has used for current interest-rate levels.

In the meantime, investors were digesting a batch of news and bracing for a market open that could see the averages fall 1 percent or more, according to fair-value comparisons with futures levels.

Intel [INTC Loading... () ] shares fell 2.4 percent in premarket trading after Morgan Stanley [MS Loading... () ] downgraded the semiconductor sector to equal-weight from overweight, and cut the entire industry to cautious from attractive.

Futures also were hit by an earnings miss from UBS [UBS Loading... () ], which reported its fourth straight quarterly loss and saw its US-traded shares drop 6.7 percent premarket.

Elsewhere, Burlington Northern Santa Fe [BNI Loading... () ] will be acquired by Warren Buffett's Berkshire Hathaway [BRK.B Loading... () ] for $100 a share. Burlington shares jumped 28.4 percent, about in line with the premium on the $44 billion deal. Simultaneously, Buffett said Berkshire is offering a 50-for-1 stock split for its Class B shares.

News of the deal helped propel futures off their lows for the morning.

Wall Street's major averages did wind up gaining ground Monday after a turbulent session that saw the Dow erase a 145-point gain and then move back into positive territory by the close.

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Only one economic stat of note on the calendar, with the government releasing September factory orders at 10 am. Economists are looking for a September gain of 1 percent.

U.S. automakers release their October sales numbers, starting with Ford [F Loading... () ] at noon. Analysts are expecting to see more market-based results now that the cash-for-clunkers surge and subsequent drop has passed.

In other deal news, Black and Decker [BDK Loading... () ] is being acquired by Stanley Works [SWK Loading... () ] in an all-stock deal. The transaction involves $3.5 billion in stock, based on Monday's closing prices, with the assumption of debt and other items bringing the total value of the deal to approximately $4.5 billion.

Stanley shares rose 4.5 percent premarket while Black and Decker jumped about 23 percent.

It's a fairly busy morning of earnings, with the following companies among those set to release quarterly numbers: AmerisourceBergen; Archer-Daniels Midland; Rockwell Collins; Cablevision; Diebold; Emerson; Expeditors International; IntercontinentalExchange; MasterCard; Medco Health; Marathon Oil; Royal Caribbean; Teva Pharmaceutical; Tenet Healthcare; UBS; Viacom; Vornado Realty.