Wall Street to open up as Fed concerns ease; GDP estimate cut

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks were set to open higher on Wednesday, indicating the S&P 500 may build on its biggest gain in nearly two weeks on Tuesday, as concerns eased that the U.S. Federal Reserve will soon rein in its stimulus measures.

The S&P 500 rose nearly 1 percent Tuesday, its most since June 13, as data on durable goods orders, sales of new homes and consumer confidence all topped analysts' expectations and the People's Bank of China eased concerns about a possible banking crisis in the world's second-largest economy.

Still, the benchmark S&P index remains down 3.9 percent since the Fed signaled last week that it may begin to scale back its stimulus efforts should its economic forecasts hold.

"If you look at the actual statement (Fed stimulus) is going to be data dependent and if you look at the Fed forecasting, they are usually more optimistic than what has actually happened," said Rick Robinson, regional chief investment officer for Wells Fargo Private Bank in Scottsdale, Arizona.

"So the markets are finally realizing (the Fed's moves) will be data dependent, let's watch and see what happens to the data."

Data showed a final estimate for gross domestic product growth at a 1.8 percent annual rate. Economists in a Reuters survey forecast a 2.4 percent annualized pace of growth, the same as the preliminary estimate for the quarter.

"Everyone wants to know when the Fed is going to taper so it's really looking forward, what is the second quarter going to be?" said Robinson.

Gold stocks were under pressure as the precious metal fell to its lowest in almost three years, putting it on course for a record quarterly loss. U.S.-listed shares of Gold Fields Ltd dropped 5.1 percent to $4.82 and Barrick Gold Corp lost 3.3 percent to $15.58 in premarket trading.

S&P 500 futures rose 9.7 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 65 points, and Nasdaq 100 futures added 20.75 points.

Monsanto Co shed 0.4 percent to $101.01 before the opening bell after the world's largest seed company said its quarterly profit fell, but sales remained on an upswing.

Food manufacturer General Mills slipped 0.7 percent to $48 in premarket trading after giving a forecast for the new fiscal year that fell shy of expectations, even as its quarterly profit was in line with estimates.

Microsoft Corp climbed 1 percent to $33.99 in premarket trading after Morgan Stanley raised its rating on the software company to "overweight."

Other S&P 500 companies due to report on Wednesday include Bed, Bath & Beyond Inc and Paychex Inc .

Equities may also receive a boost from quarter-end "window dressing" by fund managers, the practice of selling underperforming stocks and buying outperformers, to enhance the appearance of their portfolios.

(Editing by Bernadette Baum)