* Fed announces monetary policy decision 12:30 p.m. ET
* Fed set to keep buying $85 bln per month in assets
* BlackRock sees S&P 500 at new peak by end-2013
* Futures up: S&P 2.5 pts, Dow 16 pts, Nasdaq 7.5 pts
By Angela Moon
NEW YORK, Dec 12 Wall Street was set for a sixth
day of gains on Wednesday as investors anticipated the U.S.
Federal Reserve will announce a fresh stimulus plan to support
the economy at the end of a two-day monetary policy meeting.
The Fed is expected to unveil a new round of bond buying
later on Wednesday to boost a fragile economic recovery
threatened by political wrangling over the government's budget.
The monetary policy committee's decision is expected around
12:30 p.m. ET (1730 GMT)
"I think the market has already discounted that the Fed is
going to announce more stimulus, so what's more important is
what Chairman Bernanke says, which may give us clues on economic
activity going forward," said Peter Cardillo, chief market
economist at Rockwell Global Capital in New York.
"We might see a bit of selloff after Bernanke's comments,
but we've been up for five straight days, so that shouldn't be
Negotiations intensified to avert the "fiscal cliff" - tax
hikes and spending cuts that kick in early in 2013 - ahead of a
year-end deadline as President Barack Obama and U.S. House of
Representatives Speaker John Boehner spoke by phone on Tuesday
after exchanging new proposals.
BlackRock, one of the world's biggest asset managers,
expects the S&P 500, the broad measure of U.S. stocks, to scale
new heights in 2013 and reach 1,600 by the end of the year.
That's a gain of more than 12 percent from current levels and
would surpass the index's previous peak of 1,576.09 set in 2007.
On Tuesday, the S&P 500 closed at its highest level since
Nov. 6, led by technology companies. With just two weeks of
trading left this year, the S&P 500 is up about 13.5 percent so
far; it ended the year flat in 2011.
S&P 500 futures rose 2.5 points and were 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 gained 16
points, and Nasdaq 100 futures added 7.5 points.
Data on Wednesday showed U.S. import prices fell the most in
five months in November as food and fuel costs tumbled, keeping
inflation pressures subdued against a backdrop of weak economic
activity. The equity markets' reaction to the report was muted.
India's government announced an inquiry into lobbying
practices by Wal-Mart Stores Inc. on Wednesday after a
report that the giant retailer had pressed U.S. lawmakers to
help gain access to foreign markets.
Costco Wholesale Corp posted a 30 percent rise in
quarterly profit, beating expectations, as the largest U.S.
warehouse club chain saw sales rise and got a lift from higher
Sprint Nextel Corp is in talks with Intel Corp
and Comcast Corp to buy out their stakes in
the U.S. wireless provider Clearwire Corp, two people
familiar with the matter said on Tuesday.