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June 18, 2014  Wed 7:12 AM CT

SPX: SEE CHART GET CHAIN FIND STRATEGIES
Stocks are continuing higher this morning as investors await the Federal Reserve's policy announcement at 2 p.m. ET.

S&P 500 futures are up less than 0.05 percent, while the Nasdaq 100 is indicated higher by 0.15 percent. Europe is also posting small gains, while most of Asia fell in the overnight session. Recent leader India declined more than 1 percent, though Japan rose 0.9 percent thanks to a weak yen.

The S&P 500 broke free of a three-month consolidation pattern in mid-May and pulled back slightly last week before quickly finding support around at 1930. Investors have been pricing in an improving economy as employment remains strong and forward-looking indicators such as regional Fed surveys and consumer credit point toward quicker growth this year.

Today's Fed announcement is expected to bring more of the same: a $10 billion reduction in its bond-buying program and no change in interest rates. The risk is that policy makers will implement hawkish language in their statement after consumer inflation rose more than expected yesterday. In other data, mortgage applications fell 9.2 percent last week, and the Energy Department is scheduled to release crude-oil inventories at 10:30 a.m. ET.

The market has shown a pattern of rotating strength, with various sectors and indexes advancing at different times. Small caps have benefited from that trend recently, leading the market higher in the last two weeks after falling sharply in March and April. Capital has also streamed into solar stocks, drug developers, energy, and real-estate services. Transports, the strongest group on a year-to-date basis, have lagged recently. (See researchLAB for more)

In company-specific news, Adobe Systems is up 9 percent after reporting better-than-expected results. Readers of our Advantage Point newsletter stand to roughly triple their money with a call spread recommended by optionMONSTER co-founders Pete and Jon Najarian in April.

FedEx rose 4 percent after earnings and revenue surpassed estimates. La-Z-Boy dropped 9 percent after sales grew less than forecast. Other companies reporting today include Jabil Circuit and Red Hat this afternoon.

Commodities are mostly higher as grains rose more than 0.5 percent, while oil and copper posted smaller gains. Precious metals inched lower. The weak yen, which tends to support equities, remains the primary theme in currency markets.
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