Futures Point to Flat Open as Fed Meets


Futures indicated a flat open for the U.S. stock market Tuesday, following modest losses the previous day, as Federal Reserve policymakers begin a two-day meeting in Washington.

In the morning's economic news, productivity rose 6.4 percent in the second quarter, better than expected, after a modest 0.3-percent increase in the first quarter. Unit labor costs fell 5.8 percent, more than double the first quarter's 2.7-percent decline.

Small business confidence slipped last month, the National Federation of Independent Business  reported.

"We're still not sure that things are going to get better," William Dunkelberg, the NFIB's chief economist, said in a live interview on CNBC.

The NFIB said its small business confidence index fell in Julyfor the second straight month, dropping 1.3 points to 86.5. Dunkelberg said the number is consistent with negative growth in gross domestic product, depsite the predictions of many economists who see GDP turning positive this year.

At mid-afternoon Wednesday, the Fed will make its latest pronouncement on interest rates and the economic outlook — and perhaps, more importantly to investors, will shed some light on exit strategies for the extraordinary measures implemented to deal with the financial crisis.

Still to come, we'll get a reading on June business inventories at 10am ET. Economists expect to see inventories shrunk by 0.9 percent.

More Treasury auctions for investors to watch this week, as those sales — and the deficit they're designed to bridge — get increasing attention.

The Treasury will auction $37 billion in 3-year notes today, with results coming shortly after 1 pm New York time. That will be followed by $23 billion in 10-year notes Wednesday and $15 billion in 30-year bonds Thursday.

More moving-and-shaking news out of the auto sector: General Motors executives said the all-electric Chevrolet Volt — expected to hit showrooms late in 2010 — will get 230 miles per gallon.

President Obama will take his pitch for health care reform on the road again today, this time hosting a town hall in New Hampshire that begins at 1:30 pm New York time.

No earnings reports of note are scheduled before the bell, but Applied Materials , the largest maker of semiconductor manufacturing equipment, will report in the late afternoon.

Shares of Freddie Mac , the battered government sponsored mortgage agency, continued to climb, gaining 6 percent in premarket trading a day after the company reported its first quarterly profit in two years. Its sister agency, Fannie Mae , saw shares climb 17 percent premarket.

- Peter Schacknow contributed to this report.