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US STOCKS - Futures flat as investors weigh Fed's economic outlook
March 14, 2012 / 12:21 PM / in 6 years

US STOCKS - Futures flat as investors weigh Fed's economic outlook

* Most U.S. banks pass stress tests

* Q4 current account, Feb import-export data on tap

* Futures: Dow up 17 pts, S&P off 0.5 pts, Nasdaq off 1.25 pts

By Chuck Mikolajczak

NEW YORK, March 14 (Reuters) - U.S. stock index futures were little changed on Wednesday as investors weighed comments from the U.S. Federal Reserve on the economy and banking sector against the recent five-day rally.

The Fed said most of the largest U.S. banks passed their annual stress test in a report that underscored the recovery of the financial sector but called out a few laggards, including Citigroup Inc.

The Fed also said late Tuesday it expects “moderate” growth over coming quarters with the unemployment rate declining gradually versus the “modest” growth the central bank said it expected in January.

Banks have been a leading component of the 11 percent rally in the S&P for the year, with the KBW Bank index up more than 20 percent and the S&P financial sector index up more than 18 percent.

“The stress tests kind of marked the unofficial end of the 2008 financial crisis,” said Rick Meckler, president of investment firm LibertyView Capital Management in New York.

“There is a lot of news in the market in the last couple of days of a global nature,” Meckler said, referring to the Greek debt crisis and the Fed’s policy statement. “Given the fact the market has rallied so far, you have investors coming in today and trying to consider what the next phase for the market will be.”

Bank of America Corp climbed 2.6 percent to $8.71 in premarket trade. Citigroup Inc dropped 4.2 percent to $34.93.

S&P 500 futures shed 0.5 point and were roughly even with 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 rose 17 points, and Nasdaq 100 futures lost 1.25 points.

The increasing optimism on the U.S. economy helped boost the dollar, which hit an 11-month high against the yen and 1-month high versus the euro.

Economic data on tap for Wednesday includes fourth-quarter current account deficit figures from the Commerce Department at 8:30 a.m. (1230 GMT). Economists forecast a $114.2 billion deficit versus a deficit of $110.28 billion in Q3.

Also due at 8:30 a.m. are import-export prices for February. Economists forecast a 0.6 percent rise in import prices and a 0.2 percent increase in export prices. In the prior month, import prices rose 0.3 percent and export prices were up 0.2 percent.

Swiss drugmaker Roche Holding AG said it received a request for additional information from the Federal Trade Commission related to its $5.7 billion hostile bid for U.S. gene decoder Illumina Inc.

Gaming company Zynga Inc announced a $400 million secondary offering, and the shares edged up slightly in premarket trading.

European shares rose to reach fresh 33-week highs, led by financials as Fed improved its economic outlook for the world’s largest economy and said most U.S. banks had passed its stress tests.

Asian shares advanced as upbeat U.S. economic data plus signs of improving capital positions at big American banks stoked appetites for risk.

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