U.S. stocks are set to open slightly higher on Wednesday as concerns about an aggressive Federal Reserve interest rate hike eased and investors look to early quarterly reports for clues about the rest of the corporate earnings season. Earnings from investment bank Bear Stearns Cos. and U.S. electronics chain Best Buy Co. Inc. early in the day will be in focus. Investors are also digesting a strong earnings report from technology bellwether Oracle Corp. . A key economic report from the previous session that showed the rise in consumer prices, excluding volatile food and energy costs, was mild in May, could continue to give a boost to markets. The so-called core consumer price index reading soothed investors' fears that the Fed may raise rates as much as a half a point when it meets at the end of the month, analysts said, helping to tack on solid gains on Tuesday.
"We have strong economic numbers, we have strong earnings and we have people getting comfortable with the fact that Mr. Greenspan is going to have a measured response in terms of increasing interest rates," said Jim Thorne, senior portfolio manager at investment company MTBIA. Economic reports coming on Wednesday will shed light on the housing market, industrial production and regional economic conditions. Equity index futures signaled a slightly higher open. Standard & Poor's 500 stock index futures for September ticked up 1.30 points, while Dow industrials futures added 19 points. Nasdaq 100 futures for the same month gained 2 points. At 8:30 a.m. (1230 GMT), the Commerce Department releases its May housing starts. Economists polled by expect starts fell to 1.950 million in May from the previous month's 1.969 million unit annualized rate. Permits probably dropped to an annualized level of 1.970 million units from the 2.006 million unit rate in the previous month. At 9:15 another report comes on industrial production, which likely increased in May driven by a steadily accelerating factory sector and improved capacity utilization. Economists polled by expect a median rise in industrial production of 0.8 percent and a rise in capacity utilization to 77.5 percent. The Federal Reserve releases its Beige Book of regional economic conditions at 2 p.m. (1800 GMT). On the earnings front, Oracle posted a 15 percent gain in quarterly profits on Tuesday as improving corporate spending drove higher sales of its flagship database software while lower taxes gave results a small boost. But its shares were lower in trade before the opening bell on Wednesday, slipping to $11.55 on the INET electronic brokerage system from their close at $11.71 on the Nasdaq on Tuesday.
Overnight in Japan, stocks advanced to seven-week highs on relief that the U.S Federal Reserve looks set to take a gradual rather than fast approach to raising interest rates. European blue chips ticked higher on Wednesday as investor concerns eased about U.S. interest rates, with France's Alcatel leading the way after recent contract wins. U.S. stocks rose on Tuesday, after a muted reading on core inflation relieved worries that the Fed would aggressively raise interest rates to ease price increases. The Dow Jones industrial average <.DJI> ended up 45.70 points, or 0.44 percent, at 10,380.43, after earlier climbing as high as 10,428.05. The broader Standard & Poor's 500 Index <.SPX> rose 6.72 points, or 0.60 percent, to 1,132.01, while the Nasdaq Composite Index <.IXIC> advanced 25.61 points, or 1.30 percent, to 1,995.60. During the afternoon, the Nasdaq had rallied to a session high of 2,006.58, putting it slightly in the plus column for the year, before it gave up some of those gains in the final hour of regular trading.///