Stock futures rise after strong durable goods data

NEW YORK -- A surprise jump in durable goods orders is giving stock futures a boost as investors continue to hope for reassuring words from the Federal Reserve later Wednesday.

The stock market is set for a higher open Wednesday after the Commerce Department reported a 1.8% rise in May orders for big-ticket items. Economists surveyed by Reuters were anticipating a decline of 0.6%.

The strong durable goods report comes ahead of the Federal Reserve's decision on interest rates and assessment of the economy, as well as data on new home sales.

The central bank is widely expected to leave its key rate unchanged at a range of zero to 0.25%. Its outlook for the economy, however, is less clear.

Investors, many of whom have placed bets over the past several months on a late-year economic recovery, are on edge as the second half of 2009 approaches. The Dow Jones industrial average is up 27.1% from the 12-year lows reached March 9, but the index has fallen 5.4% since June 12.

Gauges of the economy have been improving, but have not yet pointed to actual growth, and many traders are pricing in a Fed rate hike by the end of the year. Higher interest rates tend to hamper economic growth by discouraging borrowing.

Later Wednesday, the Treasury Department will auction $37 billion in five-year notes. Auctions have been going smoothly so far, but investors are looking for signs that demand for new Treasury supply might be waning. If demand trails off, the government will have to raise yields sharply to attract buyers. Treasury yields are closely tied to borrowing rates for consumers.

Bond prices slipped in early trading Wednesday ahead of the afternoon auction. The yield on the benchmark 10-year Treasury note, which moves opposite its price, edged up to 3.65% from 3.63%.