Stock index futures extened their gains Wednesday after the government said consumer prices rose in November, led by higher energy costs.
A separate government report showed the number of houses being constructed rebounded last month with all areas of the country showing strength.
The reports were being closely watched ahead of the a decision from Fed policymakers, which is expected at 2:15 pm New York time. Although the Fed is expected to hold rates steady, Wall Street will be scouring that statement for any elaboration on how and when the Fed plans to exit from the extraordinary measures implemented to deal with the financial and economic crisis.
U.S. consumer prices rose in line with expectations in November on a surge in energy costs, but prices were flat, excluding food and energy, the Labor Department said. The Consumer Price Index leaped 0.4 percent on a seasonally adjusted basis after an unrevised 0.3 percent gain in October.
Meanwhile, the U.S. current account deficit widened as expected in the third quarter to $108 billion, largely driven by a big trade shortfall, a Commerce Department said. The deficit rose from a downwardly revised $98 billion in the second quarter and was in line with analysts' forecasts for a third quarter shortfall of $108 billion.
Although housing starts were rose they were lower than expected in November as construction activity for single family dwellings increase only marginally. Still, the percentage increase last month was the largest since May, indicating that housing remains on a steady path to recovery.
The Commerce Department said housing starts increased 8.9 percent to a seasonally adjusted annual rate of 574,000 units, compared with the increase of 580,000 expected by Reuters.
Mortgage applications also were encouraging as they nudge higher for the third straight week.
Adobe Systems is likely to be a stock to watch, with its after-the-bell news mixed. Its quarterly results were better than Street estimates, but it withheld a 2010 forecast saying it all depends on the economy holding up.
Much attention is being paid this morning to a deal which allows Citigroup to keep tax-loss carryforwards as part of its TARP repayment deal with the government.