NEW YORK (AP) — Investors grew hopeful about an economic recovery Wednesday as the House neared a vote on an $825 billion stimulus plan that contains a mix of new spending and tax cuts.
Stock futures signaled Wall Street was set to open sharply higher.
Investors are looking to the massive government spending to jolt the economy out of a yearlong recession that is the most severe in decades.
Wall Street’s focus on Washington is on Capitol Hill, not the Federal Reserve, which is all but certain to leave its federal funds rate at a record low Wednesday to try to help the economy by making it cheaper to borrow money.
It’s unclear whether the central bank might take any new steps to help the economy, however. In December, the Fed took the unprecedented step of slashing its key rate from 1 percent to a range of zero to 0.25 percent. The Fed’s statement announcing any actions, and its assessment of the economy, is due at 1:15 p.m.
Investor sentiment has been buoyed somewhat this week by somewhat improved corporate results from the final three months of 2008. After weeks dominated by terrible results from the banking industry, investors have welcomed news that some companies are still able to gather profits despite the weak economy. Companies from United States Steel Corp. to American Express Co. turned in earnings that helped lift stocks moderately Tuesday.
The rush of earnings continues Wednesday. Starbucks Corp. and chip maker Qualcomm Inc. are set to report results.
Dow Jones industrial average futures rose 149, or 1.84 percent, to 8,242. Standard & Poor’s 500 index futures jumped 19.10, or 2.28 percent, to 857.60, while Nasdaq 100 index futures rose 24.25, or 2.05 percent, to 1,210.00.
Bond prices were little changed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 2.53 percent from late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.14 percent from 0.13 percent Tuesday.
The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude fell 18 cents to $41.40 a barrel in premarket trading on the New York Mercantile Exchange.
Early Wednesday, AT&T said its fourth-quarter earnings fell 23.6 percent as rising costs offset strength in its wireless business.
Airplane maker Boeing Co. said it swung to a fourth-quarter loss because of a labor strike and charges related to its 747 passenger jet and a legal reserve.