Here comes the Fed

NEW YORK (CNNMoney.com) -- U.S. stocks were poised for a flat open Tuesday, as investors waited to see how much relief the Federal Reserve would deliver to markets.

At 6:55 a.m. ET, S&P futures were little changed. The tech-heavy Nasdaq futures were slightly higher, pointing to a flat to modest gain for stocks in the early going.

Investors could hold back ahead of the 2:15 p.m. ET announcement from the Fed about its decision on short-term interest rates.

Markets are expecting the central bank to lower rates by a quarter of a percentage point. Traders, however, haven't ruled out a bigger, half of a percentage point cut. And investors and economists will be closely reading the statement that will accompany the Fed's decision for clues as to what the central bank will do with rates in the coming months.

The prospect of the Fed lowering rates has helped overshadow the deepening mortgage fallout. Hopes for rate cuts lifted U.S. stocks Monday, and it helped markets in Asia close higher Tuesday. But major indexes in Europe had turned lower in midday trading after opening higher.

If the Fed cuts rates, it will likely cite continued problems in the nation's mortgage and credit markets. Further problems from subprime mortgages were apparent late Monday when Washington Mutual (Charts, Fortune 500), the nation's largest thrift, said it would post a loss in the current quarter, slash its dividend and lay off more than 3,000 workers. Shares of WaMu fell more than 8 percent in pre-market trading Tuesday.

Meanwhile, mortgage finance firm Fannie Mae (Charts) announced it would follow rival Freddie Mac (Charts, Fortune 500) and change the way it repurchases the mortgages that it has guaranteed that are significantly late in its payments or in foreclosure. The moves are seen as a way for the struggling firms to preserve capital by avoiding additional large losses in the near term, although it is not likely to reduce their eventual liability. Both firms are in the process of selling additional shares of stock to raise cash needed to cover large losses.

Shares of Fannie edged up 0.4 percent in after-hours trading after a report about its change in practices late Monday.

In other corporate news, chipmaker Texas Instruments (Charts, Fortune 500) said late Monday it now expects sales and profits toward the higher end of its previously announced guidance range in the current period. Shares of Texas Instruments gained nearly 5 percent in after-hours trading Monday.

Aircraft maker Boeing (Charts, Fortune 500), a Dow component, is due to give an update on the progress of its 787 Dreamliner, which has been hit by delays and missed deadlines. Shares could be hurt if it announces it will be unable meet its goal of producing 109 of its next-generation passenger jet by the end of 2009. Shares of Boeing were little changed in Frankfurt trading early Tuesday ahead of the 10 a.m. ET update.

NYSE Euronext (Charts), the holding company for the New York Stock Exchange, opened a Beijing office Tuesday in a bid to attract more listings from Chinese companies for the New York exchange.

Oil prices crept back above the $88 a barrel mark in early trading, gaining 33 cents to $88.19 for a barrel of light sweet crude.