The day of interest-rate reckoning has arrived, and trading will be light Wednesday until the Federal Reserve announces the size of its rate cut. The Dow is set to open flat.
The news will come out around 11:15 a.m. PDT, and economists are almost certain the Fed will cut interest rates for the sixth time this year. But Fed watchers are divided on whether it will be a half- or quarter-point cut.
The five half-point cuts the Fed has made since January, including two surprise moves outside the regularly scheduled Fed meetings, have made for the most aggressive interest-rate slashing spree the Fed has been on in 14 years
Stocks to Watch
? Palm investors have some contradictions to sort out. The maker of handheld computers said its fourth-quarter pro forma loss, which excludes charges, totaled $89.2 million, or 16 cents per share, on revenue of $165.3 million for the quarter ended June 1. Despite the losses, Palm said it plans to return to profitability in its fiscal second quarter and cut its inventory levels.
? 3Com reported fourth-quarter results. Excluding charges, the networking company reported loss of 61 cents a share, wider than the 57 cents a share expected by First Call. Including charges, loss was $1.52 a share, wider than a loss of 42 cents a year earlier. 3Com said it doesn't see a pickup in its industry anytime in the near future.
? Xilinx fell in after-hours trading after the company cut its fourth-quarter sales targets. The maker of programmable semiconductors cut its first-quarter sales forecast for a second time, predicting sales will fall 24 percent amid slow orders.
? Agency.com may move on its merger news. The Internet consulting company is being snapped up by Seneca Investments, its biggest shareholder. Seneca, formed by Omnicom Group and Pegasus Partners II, said it will purchase the 62 percent of Agency.com it doesn't already own for $130 million in cash.
? Vitesse Semiconductor also issued a profit warning. The communications chipmaker said it expects to report a third-quarter loss of 6 cents a share on revenue of $60 million. First Call had been expecting a profit of 3 pennies a share.
At the Bell
The Dow Jones industrial average may open unchanged. The Standard & Poor's 500 index for June futures contracts was holding steady at 1220 at 7:10 a.m. EDT in 24-hour electronic trading.
Reuters contributed to this report.