Dow Futures Surge As Investors Celebrate Fed Decision

LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open up by 0.31% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open 0.43% higher. Both indices hit record highs yesterday, following the Fed’s decision to maintain its bond-buying programme at $85bn per month. The CNN Fear & Greed Index has surged back into the greed zone, and is set to open at 60, after closing at 54 yesterday.

European markets roared ahead this morning as investors responded to the Fed’s surprise decision, which means that the central bank will continue to pump $85bn per month into markets for at least the next two months. Stocks gained across the board, and in London, only five FTSE 100 stocks failed to make gains this morning, leaving the index up 1.46% at 7am ET. Elsewhere, the DAX was up 1.11%, and the CAC 40 was up 1.01%.

Today’s US economic reports include the latest weekly jobless claims figures at 8.30am, which are expected to show that 338,000 new claimants registered for unemployment benefit last week. Today’s figures may be of particular interest to investors, as last week’s figures were unreliable, due to incomplete submissions from two states. The US second-quarter current account balance is also due at 8.30am, and is expected to show that the current account deficit fell to $97.0bn during the last quarter, down from $106.1bn previously. At 10am, August’s existing home sales report is expected to show that sales fell to 5.2m last month, down from 5.39m in July. Also at 10am, September’s Philadelphia Fed manufacturing survey is expected to rise to 11.0, from 9.3 during August, while August’s leading indicators index is expected to remain unchanged from July, at 0.6%.

Very few companies are scheduled to report earnings today, but amongst those due to report before the opening bell are ConAgra, IHS, Rite Aid and Pier 1 Imports. Oracle shares were down 2.7% in pre-market trading and may be active today, after the software firm missed first-quarter revenue expectations in its results last night and provided a downbeat outlook for the current quarter. BlackBerry stock may also be active, and was up 1.8% in pre-market trade this morning, following reports that it will lay off up to 40% of its workforce.

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."

If you, like Buffett, are convinced about the long-term power of the Dow, you should read "5 Stocks To Retire On". Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation report.

> Roland does not own shares in any of the companies mentioned in this article.