Nagging worries about the world economy kept buyers from making big moves yesterday but stocks managed to inch higher towards the close as Wal-Mart shares received a Citigroup analyst upgrade and financials strengthened after Christopher Dodd’s unveiling of a less-harsher-than-anticipated regulatory reform plan. 

This morning, as traders await the release of the FOMC policy statement, stock futures have drifted higher. Expectations are the Fed will keep the key lending rate near historically low levels.  Dow Jones industrial average futures rose 18, or 0.2%, to 10,594.  Standard & Poor’s 500 index futures rose 2.90, or 0.3%, to 1,148.60, while Nasdaq 100 index futures rose 4.25, or 0.2%, to 1,921.25.  

In another development, European finance ministers reportedly agreed to a blueprint to help debt-ridden Greece.  However, traders gave a lukewarm response to the pledge as the form and timing remained shrouded in uncertainty.

Equity markets weakened yesterday after Moody’s (NYSE:MCO) issued a warning that heavy debt burdens could jeopardize the ratings of such developed nations as Germany, France, the UK and the US.  Chinese Premier, Wen Jiabao, warned of a double-dip recession as a result of financial system risks and high unemployment levels in some countries.  Worries that China would resort to another round of tightening also had stocks under pressure.

Traders, however, chose to overlook those concerns and sent the Dow Jones industrial average up 17.46 points, or 0.16%, to 10,642.15.  The Standard & Poor’s 500 Index edged 0.52 point, or 0.05%, higher to 1,150.51.  The Nasdaq Composite Index retreated 5.45 points, or 0.23%, to 2,362.21.

Wal-Mart (NYSE:WMT) led the gainers on the Dow average, up 2.8%, after Citi’s (NYSE:C) analysts forecast the retailer would resort to more aggressive cost structure in an effort to maintain market share gained during the recession.  General Electric (NYSE:GE) shares rose 1.5%, on news that Wal-Mart plans a 50% increase in the number of stores offering bank services this year. GE issues Wal-Mart debit cards.

US Treasuries advanced.  The 10-year increased 2/32 in price as its yield eased to 3.697%.  The US dollar rose 0.5% against a basket of currencies. Oil prices fell 1.8% to $79.80, its lowest close in two weeks, on expectations that OPEC will maintain output at current levels despite high stockpiles when it meets in Vienna this week.

Today’s release of the FOMC policy statement at 2:15 PM is not expected to be of much interest, however.  The central bank is expected to keep the key lending rate at 0.0%-0.25%, with the promise of holding rates at “exceptionally low levels for an extended period.”

Zacks Investment Research