* Fed's Williams sees QE3 expansion next year
* Caterpillar latest bellwether to cut guidance
* Paychex profit beats expectations, Red Hat disappoints
* Futures: Dow up 5 pts, S&P up 0.4 pt, Nasdaq down 0.5 pt
By Ryan Vlastelica
NEW YORK, Sept 25 U.S. stock index futures were
little changed on Tuesday as a pessimistic outlook from
Caterpillar Inc., the latest U.S. heavyweight to say the
slowing global economy was hurting profits, was offset by hopes
of more monetary stimulus.
* Equities have rallied in recent months on expectations
for stimulus from central banks around the world, and
announcements of easing earlier this month from the Federal
Reserve and European Central Bank have kept the S&P 500 near
* San Francisco Fed president John Williams said on Monday
he expected the central bank to expand its bond-buying program
next year to more aggressively combat the unemployment rate. He
also expects the program to end before the close of 2014.
* Just minutes before markets closed on Monday, Caterpillar
Inc cut its 2015 profit outlook, warning that weaker commodity
prices would result in a bigger-than-expected fall-off in
demand. Thee Dow component, however, stopped short of
forecasting a global recession. Shares fell 2.2 percent to
$88.87 in premarket trading.
* While central bank actions have kept equity gains largely
intact, recent corporate outlooks have given investors a reason
to be cautious about future growth. FedEx Corp and
Norfolk Southern were among the companies that lowered
their forecasts recently.
* S&P 500 futures fell 0.4 point but remained above
fair value, a formula that evaluates pricing by taking into
account interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures added 5
points and Nasdaq 100 futures fell 0.5 point.
* The S&P 500 is on track for a 7.6 percent gain for the
quarter, a rally largely tied to central banks' actions to
stimulate their economies. After those gains, many market
participants are looking for new catalysts to keep pushing
* Analysts said investors are probably now participating in
"window dressing," where fund managers add some of the latest
outperformers to their portfolio.
* Paychex Inc reported a first-quarter profit that
narrowly beat estimates, helped by higher revenue from its human
resource services business.
* Red Hat Inc reported a lower-than-expected
adjusted profit as costs rose, and lowered the top end of its
full-year revenue outlook on slow growth in its services
* U.S. stocks closed flat on Monday as an index of German
business sentiment declined for a fifth consecutive month in
September, showing Europe's strongest economy was moving closer
toward recession as the euro zone's debt crisis remains
unresolved. Caterpillar's outlook further pressured sentiment
going into the close.