Fed cut loses some luster

Futures point to weak open as oil prices soar above $96 a barrel to a new record; slew of economic releases on tap.

U.S. stocks were poised for a tough open Thursday as surging oil prices took some of the luster off the Federal Reserve's decision to cut rates and investors eyed a heavy economic calendar.

At 5:02 a.m. ET, futures were lower, with a comparison to fair value suggesting a weak start for Wall Street.

Crude prices set another record in Asia, rising as high as $96.24 a barrel in electronic trading before pulling back slightly to $96.05 a barrel.

The surge in oil prices could stem the rally stocks mounted Wednesday after the Fed cut short-term interest rates by a quarter of a percentage point to 4.5 percent.

Investors had widely anticipated the Fed's move and stocks rose as the market breathed a sigh of relief. But the upbeat mood could fade as investors focus their attention on the economic outlook.

There is no shortage of reports for investors to sift through on Thursday. A report on personal income and spending, which includes a key inflation measure, is due at 8:30 a.m. ET. Pending home sales and the ISM index, a gauge of nationwide manufacturing activity, also are slated for release.

Among stocks to watch, Exxon Mobil (Charts, Fortune 500) is due to report earnings before the market open.

In global trade, Asian stocks finished higher while European stocks slipped in morning trading.

Market Overview

Market Summary USAAMERICASEUROPEASIACURRENCIES Major Market Indexes Industry Indexes International Indexes Sector Performance Rates DJIA 13,930.01    +137.54    +1.00% Nasdaq 2,859.12    +42.41    +1.51% S&P 500 1,549.38    +18.36    +1.20% Dow Util 534.95    +8.49    +1.61% NYSE 10,311.61    +146.64    +1.44% AMEX 2,530.38    +41.60    +1.67% Russell 2000 828.02    +11.87    +1.45% Semcond 463.39    +4.06    +0.88% Gold future 796.00    +8.20    +1.04% 30-Year Bond 4.75%    +0.08    +1.67% 10-Year Bond 4.48%    +0.09    +2.10%  Market Diaries Issues: NYSE Nasdaq Advancing  2,392  1,999 Declining  869  1,011 Unchanged  89  102 Total:  3,350  3,112 Issues at: 52-Week High  187  89 52-Week Low  22  63 Volume: Advancing  1,227,516,000  1,872,694,000 Declining  327,599,000  640,085,000 Unchanged  10,076,000  -2,490,761,000 Total:  1,565,191,000  22,018,000 10/31/2007 8:00:00 PM Market Screener NYSENASDAQAMEXOTC Most Active by Volume on 10/31/2007 Symbol Last Change Volume IWM 82.27    +1.050 107.68M   C 41.90    -0.210 73.46M   Q 7.18    +0.120 66.08M   F 8.87    +0.070 52.00M   EMC 25.39    +0.270 38.03M   CFC 15.52    -0.420 35.85M   GE 41.16    +0.680 34.25M   XOM 91.99    +0.850 32.11M   PFE 24.61    +0.160 31.47M   BAC 48.28    +0.290 29.11M    Add symbols to My Portfolio More...

Energy stocks climbed after weekly government data showed a surprising decline in crude inventories, sending U.S. crude futures up $4.15, or 4.6 percent, to settle at a record $94.53 a barrel. During the session, oil hit a NYMEX lifetime record at $94.74. December gold was up $7.50, or 1 percent, at $795.30 an ounce, after earlier touched $800.80 an ounce.

US STOCKS-Wall St rises on optimism about growth

Wall St. in pre-Fed holding pattern

Investors await central bank's decision on interest rates; batch of economic reports due before release of Fed policy statement.

The U.S. Federal Reserve is expected to lower benchmark borrowing costs modestly on Wednesday as an additional bulwark against the risk a housing slump and tighter credit drag down the rest of the economy.

Fed officials, who will announce their decision around 2:15 p.m., have offered few clues on their likely course of action. But financial markets are betting that a spate of weak economic data will lead policy-makers to cut overnight interest rates by a quarter-percentage point, to 4.5 percent.

That would follow last month's surprisingly large half-point reduction -- a move Fed officials had hoped would put them out in front of any potential economic weakness.

"In an economic expansion that had already slowed, leading sectors continue to display surprising softness and further cautious policy action can help to contain a widening out of the damage," Citigroup economist Robert DiClemente wrote in a recent analysis.

But that view is not universally held. Some analysts think the Fed may determine housing woes are not crimping consumer or business spending and may decide the best course is to hold rates steady out of concern a misstep might ignite inflation.