Dow May Spike Ahead of Fed Meeting

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LONDON -- Stock index futures as of 6:35 a.m. EDT indicate that the Dow Jones Industrial Average may open up 0.78% this morning, while the S&P 500 may open 0.82% higher. After closing at 28 on Friday, CNN's Fear & Greed Index has fallen back to 25, or "extreme fear," suggesting that investors expect further volatility this week.

European stock markets followed Japan's example and rose strongly this morning. The Nikkei 225 closed up 2.7% today, and by 7:30 a.m. EDT the FTSE 100 was up 0.87%, while Germany's DAX was up 1.35%. Among the top performers in Europe this morning was telecommunications firm Telefonica, which rose by 3.1% following reports that the Spanish government had blocked a 70 billion euro takeover offer for the company by AT&T.

Today's U.S. economic calendar is extremely light and is unlikely to distract investors from this week's main highlight: Wednesday's monthly meeting of the Federal Open Market Committee, after which investors hope the FOMC will provide some clarity on its stimulus policy for the remainder of the year. Economic reports in the cards for today include the Empire State Survey, which is due at 8:30 a.m. EDT and is expected to record a rise to 0.9 in June, up from -1.4 in May. The Empire State Survey measures manufacturing activity in the New York area. Next, at 10 a.m. EDT, the Home Builders' Index for June is expected to have risen to 45, up marginally from 44 in May.

Companies to watch today include executive search firm Korn/Ferry International, which is expected to report earnings of $0.31 per share on revenue of $223.6 million after the close tonight. Aviation firms Boeing and Lockheed Martin could both rise when markets open: Both firms were about 1% higher in German trading this morning and may benefit from positive press coverage and marketing exposure at this week's Paris Air Show, at which Boeing will be intensively promoting its largest model, the 747-8. The stock of Theravance Inc could be actively traded after shareholders in Irish firm Elan Corporation rejected a proposed $1 billion royalties deal with Theravance. Elan is currently the subject of an $8 billion hostile bid from privately held U.S. firm Royalty Pharma.

Finally, let's not forget the Dow's daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote, "The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions." If you, like Buffett, are convinced of the long-term power of the Dow, you should read "5 Stocks To Retire On." Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation report.

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Roland Head has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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