Futures Rise Ahead of FOMC Meeting

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.

In corporate news, Samsung Electronics is considering legal action to ban sales of Apple’s new iPhone, according to Reuters, in what could be its strongest step to defend against claims by Apple that the South Korean company had copied its product designs.

General Electric edged higher after the minority owner of CNBC said it received a number of new orders with more than $3 billion in its energy business.

On the earnings front, ConAgra declined after the food producer's profit tumbled 42 percent amid higher costs in its consumer foods unit.But the company still maintained its full-year earnings forecast and said it plans to keep increasing prices.

Tech firms Oracle and Adobe are slated to post earnings after-the-bell.

Meanwhile, U.S. reinsurer Transatlantic Holdings , which rejected a takeover offer from Warren Buffett's Berkshire Hathaway , is exploring a "limited standstill" agreement with Validus Holdings, according to the Wall Street Journal.

UBS chief executive Oswald Gruebel will seek a vote of confidence at a board meeting in Singapore for plans to slash the investment banking division that caused a $2.3 billion loss due to unauthorized trading, Reuters reported, citing a Swiss newspaper.

—Follow JeeYeon Park on Twitter: twitter.com/JeeYeonParkCNBC

On Tap This Week:

TUESDAY: FOMC mtg begins; Earnings from Oracle, Adobe
WEDNESDAY: Weekly mortgage apps, existing home sales, oil inventories, FOMC mtg announcement, Coca-Cola analyst mtg; Earnings from General Mills, Bed, Bath & Beyond
THURSDAY: Jobless claims, FHFA home price index, leading indicators, Geithner speaks at Global Economy Summit; Earnings from Discover Financial, FedEx, Nike
FRIDAY: IMF/World Bank annual mtg; Earnings from KBHome

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