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Futures Rise Ahead of Fed Action

U.S. stock index futures indicated a higher open Tuesday as investors hoped for fresh direction from the Federal Reserve along with another cut in interest rates.

Analysts expect the Fed to slash at least 50 basis points from its base rate, which would bring the rate close to zero. But the accompanying statement is likely to draw more attention than the actual announcement.

Market watchers are hoping the Fed will signal quantitative easing measures, which essentially involves printing more money, to restore growth and signal an end to the ongoing recession.

Investors will also be waiting for earnings from Goldman Sachs to get a read on the state of the embattled banking sector. Some analysts fear the Wall Street giant could post its first loss since the market crash of 1929 but Goldman shares rose 2.3 percent in premarket trading.

Also in the sector, Citigroup shares gained 1.35 percent premarket after it said it was going to sell its Japan trust banking unit.

Retailer Best Buy is also expected report earnings before the bell.

Further fallout from Bernard Madoff's alleged Ponzi scheme could drag on the markets as the day progresses, and light pre-Christmas volumes could make stock moves highly volatile.

The fate of the Big Three automakers remained uncertain following the failure of a proposed bailout bill in the Senate. The Bush administration could use part of the $700 billion fund designed to stabilize the financial sector to backstop the car makers.

Ford shares gained nearly 2 percent premarket.

On the economic front, November’s consumer price index and housing starts will be out at 8:30 am.