Wall Street to open flat after Fed outlook, bank results

NEW YORK (Reuters) - Stock index futures pointed to a flat open on Wednesday as investors weighed comments from the 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 <.bkx> up more than 20 percent and the S&P financial sector index <.gspf> up more than 18 percent.

"Certainly this is good news for the overall domestic financial system. It really shows banks have turned themselves around, raised capital significantly and are being much smarter and less aggressive about their capital positions, and that should give investors confidence in the system," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.

"There is constant chatter about a correction ... given we've been pretty much since December on an uninterrupted rise," Ghriskey said.

Bank of America Corp climbed 2.6 percent to $8.71 in premarket trade. Citigroup Inc dropped 3.6 percent to $35.15.

S&P 500 futures edged up 0.4 point and were slightly 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 rose 17 points, and Nasdaq 100 futures gained 2 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.

Data on Wednesday showed import prices rose in February on sharply higher petroleum costs, but there were few signs of underlying imported inflation pressures, and imported capital goods prices edged down 0.1 percent after advancing 0.4 percent in January.

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 advanced 0.8 percent to $13.48 premarket after the online gaming company announced a $400 million secondary offering.

(Editing by Padraic Cassidy)

Source: http://news.yahoo.com/stock-index-futures-signal-mixed-wall-st-opening-094024485.html

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