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Dow Futures Edge Higher After Strong Gains

LONDON — Stock index futures at 7am ET indicate the Dow Jones Industrial Average (DJINDICES: ^DJI) may open up by 0.05% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open unchanged. The CNN Fear & Greed Index has returned to the neutral zone, and is set to open at 49, after closing at 43 yesterday.

Most European markets edged higher this morning, although the FTSE 100 was largely flat in London, despite a 4.3% rise for chip designer ARM Holdings, which analysts expect to benefit from improved margins on the chips used in the new Apple iPhone models.

At 7am ET, the FTSE 100 was down 0.1%, the DAX was up 0.6%, and the CAC 40 was up 0.1%.

Today’s US economic reports are limited to July’s wholesale inventories at 10am, and investors may be more interested in the progress of talks aimed at avoiding US military intervention in Syria, following Russia’s offer to police the surrender of Syria’s chemical weapons arsenal.

Next week’s Federal Open Markets Committee meeting may also weigh on markets, as expectation grows that the Fed will reduce its bond purchases by around $10bn a month, following the meeting.

Corporate earnings are limited today. Companies scheduled to report after tonight’s close include Vera Bradley and The Men’s Wearhouse, which is expected to report second-quarter earnings of $1.14 per share, according to consensus forecasts compiled by Reuters.

Last night’s third-quarter outlook from Texas Instruments may also be of interest; the chip maker is expecting to deliver earnings of between $0.51 and $0.55 per share in the third quarter on revenue of between $3.15bn and $3.29bn, broadly in-line with analysts’ estimates.

New Dow constituents Visa, Goldman Sachs and Nike may also be actively traded, along with outgoing members Hewlett-Packard, Alcoa and Bank of America, as institutional investors adjust their portfolios to reflect the Dow’s new composition.

The Dow changes will take place on September 20, after the closing bell.

Morgan Stanley is also expected to be active — the bank’s stock was up 1.1% in pre-market trading, suggesting Morgan Stanley will extend a strong run that has seen its share price gain nearly 7% during the last five days, double the gain enjoyed by the wider market.

Finally, let’s not forget the Dow’s daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote: “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.

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> Roland does not own shares in any of the companies mentioned in this article. The Motley Fool owns shares in Apple.