Futures were higher on Tuesday as investors waited for the outcome of a two-day meeting of the Federal Open Market Committee on interest rate policy.
The Fed is expected to try to push already low long-term interest rates even lower this week by tilting towards longer-duration bonds in its portfolio, a move known as Operation Twist.
The meeting follows efforts by President Obamato reduce the budget deficit by $3.6 trillion partly by raising taxes on the rich. Republicans immediately rejected the proposals as a political stunt, labeling the plans “class warfare," and made clear the proposal had little chance of becoming law.
Meanwhile, European shares were positive despite news that ratings agency Standard & Poor’s downgraded Italy’s credit rating one notch and maintained its negative outlook for the Italian economy. The surprise move sharply will increase pressure on policymakers to take more decisive action to resolve the crisis.
Stocks staged a strong comeback in the final hour of trading in the previous session, cutting their losses by more than half, following a report that the Greek finance minister official said the debt-ridden nation may be close to a deal with its international lenders, according to Reuters.
On the economic front, housing starts fell more than expected, down 5.0 percent to a seasonally-adjusted annual rate of 571,000, in August, according to the Commerce Department.
