Rethinking the Fed

Futures rise as investors regain confidence in the central bank's ability to ease strains in financial markets.

Subscribe to Markets
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

LONDON(CNNMoney.com) -- U.S. stocks looked set for a higher open Wednesday, as investors overcame their disappointment of the Federal Reserve's rate cut and focused on other moves the central bank may take to restore confidence in financial markets.

At 5:21 a.m. ET, Nasdaq and S&P futures were higher, pointing to a higher start for stocks.

The Fed's decision sank stocks on Tuesday. The Dow plummeted nearly 300 points after the central bank cut its key short-term interest rate by a quarter of a point, disappointing investors who had hoped for a half of a percentage point cut.

But according to a report in The Wall Street Journal, Fed officials are considering other tools to encourage lending among banks and could make a move in days. Possible action could include another reduction in the discount rate, the extension of longer-term loans to money-market dealers, as well as looser collateral rules for borrowing from the Fed, the report said.

While investors have been looking to the Fed to bail out the markets from the mortgage meltdown, there is a growing sense that monetary policy alone won't be enough to solve the current crisis. In a commentary piece published in the Journal, former Fed chairman Alan Greenspan said the current crisis will end when the glut of home inventories is cleared out and home prices start falling.

A number of economic reports are due, including readings on November import and export prices and the trade balance in October. Both of those releases are due at 8:30 a.m. ET.

Oil prices fell ahead of the U.S. government's weekly report on fuel inventories. Light, sweet crude for January delivery fell 36 cents to $89.63 a barrel in Asian electronic trading. The stockpiles report is on tap for 10:30 a.m. ET.

Among stocks to watch, Exxon Mobil (Charts, Fortune 500), the nation's largest oil company, said Tuesday it plans to build a floating liquefied natural gas terminal off the coast of New Jersey.

In global trade, major Asia markets retreated as investors expressed disappointment with the Fed's move. European stocks fell in early trading. To top of page

Photo Galleries
These 10 food trends could dominate 2015 So long, kale. Here's what's expected to shake up the food industry next year. More
Beyond Russia: Geopolitical hot spots in 2015 Investors beware: These 5 global crises are likely to rattle the stock market and world economy. More
These 20 antique guns could fetch big bucks Morphy Auctions in Pennsylvania is putting nearly 1,000 old guns on the block. Here are just a few. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.