* Tesla drops in premarket after results, outlook
* Microsoft narrows CEO search
* Ralph Lauren climbs after earnings, dividend boost
* Futures up: Dow 57 pts, S&P 8 pts, Nasdaq 12 pts
By Chuck Mikolajczak
NEW YORK, Nov 6 U.S. stocks were set for a
higher open on Wednesday on hopes the Federal Reserve will keep
its stimulus measures in place longer than anticipated, ahead of
key data later in the week on the labor market and economic
John Williams, president of the San Francisco Federal
Reserve Bank, said Tuesday the Fed should wait for stronger
evidence of economic momentum before pulling back on its massive
bond-buying program, but should then announce a definitive end
to the stimulus.
Adding to speculation about a more dovish Fed, two of the
Federal Reserve's top staff economists made the case in new
research papers for more aggressive action by the U.S. central
bank to drive down unemployment by promising to hold interest
rates lower for longer.
Many market participants anticipate that the Fed will hold
off on scaling back its $85 billion monthly bond purchases until
next year, on expectations the partial government shutdown in
early October has dented the economy. However, some feel the
market will be able to absorb a tapering of stimulus in
"We actually got to a point in time in August which was very
healthy when we bounced off the lows and realized that if
tapering happens it's not necessarily bad news," said Art Hogan,
managing director at Lazard Capital Markets in New York.
"To the extent that what has changed about the Fed -
interest rates may be lower longer, even in an environment of
tapering quantitative easing, which is, at best, a neutral, but
it's not a negative."
Data expected on Wednesday includes the Conference Board's
leading economic indicators for September at 10:00 a.m. (1500
GMT). Economists in a Reuters survey forecast a 0.6 percent
increase compared with a 0.7 percent rise in August.
Later in the week, investors will look to the delayed
reports on gross domestic product and non-farm payrolls to
assess the chances of a change in Fed policy.
The S&P 500 is up 23.6 percent for the year, putting
the benchmark index on track for its best yearly performance
since 2003, boosted largely by the Fed's stimulus measures.
S&P 500 futures rose 8 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 57
points and Nasdaq 100 futures added 12 points.
Tesla Motors Inc shares slumped 11 percent to
$157.43 before the opening bell after the electric car maker
forecast a weaker-than-expected fourth-quarter profit and posted
third-quarter Model S deliveries that disappointed some
Microsoft Corp edged up 0.8 percent to $36.93 in
premarket trading after sources familiar with the matter said
the world's largest software maker had narrowed its list of
external candidates to replace Chief Executive Steve Ballmer to
about five people, including Ford Motor Co chief Alan
Mulally and former Nokia CEO Stephen Elop.
As earnings season winds down, S&P companies expected to
report include Qualcomm Inc and Whole Foods Market Inc
Ralph Lauren Corp shares advanced 3.3 percent to
$176.77 in premarket after the designed clothing company raised
the lower end of its full-year sales forecast on the expectation
of strong gains during the holiday quarter, and increased its
According to Thomson Reuters data, of 404 companies in the
S&P 500 that reported results through Tuesday morning, 69.6
percent beat Wall Street's expectations, above the long-term
average of 63 percent. However, just 53.3 percent beat revenue
forecasts, below the 61 percent average since 2002.