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Wall Street Seeks Reassurance From FOMC Hopes


With the FOMC meeting looming ahead, Wall Street sentiment may remain guarded, as traders remain hopeful that the central bank will be responsive to the economic uncertainty. Earlier in the day, Asian stocks went about in a listless manner and the European averages are currently seeing modest weakness. Main Street activity is likely to be light, with only the trade balance report for July due for the day. That said, the FOMC meeting and a verdict by the German constitutional court on the ESM due on Wednesday could keep traders on the edge.

As of 6:15 am ET, the Dow futures are adding 28 points, the S&P 500 futures are moving up 2.80 points and the Nasdaq 100 futures are gaining 3.75 points.

U.S. stocks retreated on Monday, as the stimulus expectations-boosted rally of the past week lost steam amid a lack of any major catalysts.

On the economic front, the trade gap data for July is due out at 8:30 am ET. Economists estimate that the trade gap widened to $44.3 billion in the month from $42.9 billion in June.

In corporate news, Sonic Automotive (SAH) said its Vice Chairman and CFO David Cosper has informed his intention to retire effective at a yet-to-be-determined date sometime during the first quarter of 2013.

Sonoco (SON) lowered its third quarter non-GAAP earnings per share guidance to 51-53 cents per share from 62-66 cents per share, citing operating problems at several of its North American uncoated recycled paperboard mills. Analysts estimate earnings of 62-66 cents per share. The company also said it has removed its non-GAAP earnings guidance for the full year.

Shuffle Master (SHFL) said its third quarter earnings per share rose 6 percent to 18 cents per share and revenues rose 9 percent to $63.4 million. The results trailed expectations.

Casey's General (CASY) reported first quarter earnings of $1.01 per share compared to $1.03 per share last year. Total revenues were almost flat at $1.87 billion. The earnings exceeded estimates, while the revenues were below expectations.

Federated Investors (FII) said it has acquired about $4.4 billion in assets from Fifth Third Asset Management.

AIG (AIG) announced that the Treasury has priced an offering of about 553.8 million shares of the company at an IPO price of $32.50 per share.

The Asian markets meandered around, showing a lack of direction, before closing on a mixed note. The 2-day FOMC meeting that gets underway tomorrow and the German constitutional court's judgment on the ESM also due tomorrow rendered the mood cautious.

Japan's Nikkei 225 average o closed down 61.99 points or 0.70 percent at 8,807. Export stocks retreated, as the yen firmed up in the Asian session.

Chipmaker Sumco was the biggest loser among the index components, tracking the weakness in Intel shares on Wall Street overnight. Meanwhile Toyobo, Shinsei Bank, Mitsumi Electric and JTEXT also showed notable weakness. On the other hand, Unitika and Nisshin Steel added over 5 percent each.

Australia's All Ordinaries closed down 9.70 points or 0.22 percent at 4,348. Most sectors, barring defensive healthcare stocks, came under selling pressure. Hong Kong's Hang Seng Index closed at 19,858, down 30.71 points or 0.15 percent.

On the economic front, a survey by the National Australia Bank showed that business confidence in Australia deteriorated in August. The business confidence index fell t -2 in August from 3 in July. Meanwhile, the business conditions index rose to 1 from -3 in July.

European stocks are trading lower for the second straight session amid doubts whether the Federal Reserve will deliver in line with expectations.

In corporate news, Philips (PHG) announced the elimination of 2,200 additional jobs in a bid to save an additional 300 million euros. U.K. luxury retailer Burberry lowered its full year profit guidance towards the low-end of its earlier forecast. The company also said that its same store sales remained flat year-over-year in the 10 weeks ended September 8th.

A monthly survey by the Royal Institution of Chartered Surveyors showed that its index measuring the average asking price for a home in the U.K. came in at -19 in August, up from July's revised balance of -23. This beat forecasts for a score of -22.

German wholesale price inflation accelerated for the second straight month, according to a report released by the Federal Statistical Office. The wholesale price index rose 3.1 percent year-over-year in August compared to expectations for a 2 percent increase.

A report released by INSEE showed that the number of employed people in France fell to 22,400 in the second quarter from 22,800 in the first quarter.

U.K.'s visible trade deficit declined to 7.1 billion pounds in July from a deficit of 10.1 billion pounds in June. Economists expected a more modest drop to 10 billion euros.

by RTTNews Staff Writer

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