Wall St. in pre-Fed holding pattern

NEW YORK (CNNMoney.com) -- U.S. stock futures drifted slightly higher early Wednesday ahead of the Federal Reserve's decision on interest rates.

Investors are widely expecting the Fed to cut rates for a second straight time when it releases its policy statement at 2:15 p.m. ET. Some are anticipating the central bank to slash rates by as much as a half-percentage point.

As always, investors will scrutinize the Fed's statement, looking to see what policymakers say about the housing market, credit crunch and economic outlook for clues as to what the central bank will do next with interest rates.

Some economists believe this won't be the last rate cut this year.

A bevy of economic reports are on tap ahead of the Fed statement. The Commerce Department's first take on third-quarter gross domestic product, the broadest measure of the nation's economic activity, is due at 8:30 a.m. ET.

While economists are in general agreement the economy slowed from the 3.8 percent annual growth rate in the second quarter, those surveyed by Briefing.com still forecast a healthy 3.1 percent pace of growth in this initial third-quarter reading, despite the meltdown of credit markets and problems in housing prices and home building in the period.

The GDP report will also contain a key inflation measure, the chain deflator, which measures prices paid by consumers. Economists are forecasting that fell to a 2 percent annual growth rate from 2.6 percent in the second quarter.

A report on construction spending and the Chicago PMI, a regional manufacturing survey, are both due after the market open. Another inflation reading due at 8:30 a.m. ET is the Labor Department's Employment Cost Index, which is forecast to show a 0.9 percent rise in the third quarter compared to the previous three months, the same pace of growth seen in the second quarter.

The government is also due to release its weekly fuel inventory report. Crude prices closed at a record $93.53 a barrel on Monday, but they retreated Tuesday, closing down $3.15, and that slide continued in trading in Asia Wednesday, taking the price below the $90 benchmark to $89.89.

In corporate news, French-American telecommunications equipment maker Alcatel-Lucent (Charts) slashed 4,000 jobs after it reported what it termed an "unsatisfactory" $373 million loss in the third quarter. Shares gained 1 percent in Paris trading following the news.

In other telecom news, Verizon Wireless, a joint venture between Verizon (Charts, Fortune 500) and Vodafone (Charts), as well as Sprint Nextel Corp (Charts, Fortune 500). are in "advanced talks" with Google (Charts, Fortune 500) about selling cell phones powered by Google software, according to the Wall Street Journal.

The Journal also reported that private equity firm Cerberus Capital Management had withdrawn its $6.2 billion buyout offer for Affiliated Computer Services (Charts, Fortune 500) in another sign of problems in the global debt markets.

In global trade, Asian stocks finished mixed after the Bank of Japan cut its yearly economic growth forecast by 0.3 percentage points and held interest rates steady Wednesday and European stocks edged lower in morning trading.

The dollar fell to another record low against the euro although it rose versus the yen as investors anticipated a Fed rate cut.