U.S. stocks: Futures off as investors brace for Fed

Madrid-Spain (Sept 16)  U .S. stock futures fell modestly on Tuesday, with investors in a risk-averse mood, and tech stocks in particular setting up for another weak day as many fretted that the Federal Open Market Committee meeting will deliver hawkish talk on interest rates.

Futures for the Dow Jones Industrial Average US:DJZ4  fell 17 points to 16,926, while those for the S&P 500 index SPZ4, -0.13%  eased 1.7 points to 1,974.40. Futures for the Nasdaq-100 index NDZ4, -0.22%  fell 5.5 points to 4,020.

The data of note Tuesday are producer prices for August, due at 8:30 a.m. Eastern Time. But most investors will be focused on the start of the two-day Federal Open Market Committee policy meeting.

Tech and small-cap stocks led a mostly losing day on Wall Street on Monday, with the Nasdaq Composite COMP, -1.07%  dropping 1.07% as investors turned risk-averse ahead of the Fed meeting. Analysts are looking for a change in the Fed’s language that could signal sooner-than-expected rate hikes.

Alain Bokobza, global head of asset allocation at Societe Generale, and his team on Tuesday advised investors to “switch out of expensive, illiquid and over-owned assets,” rotating out of small caps and into large-caps in the U.S. and Europe. “As the Fed continues to normalize its monetary policy, small caps are at risk of a large correction,” he said. Read Need to Know: A dearth of deep-value plays

Data compiled by Bloomberg News showed 47% of stocks in the Nasdaq Composite are down at least 20% from their peak in the last 12 months, and more than 40% have fallen by as much in the Russell 2000 index RUT, -1.21% RUT, -1.21% RUT, -1.21% Meanwhile, the S&P 500 index has logged 33 new closing highs this year, and less than 6% of companies are in what’s considered bear-market territory, Bloomberg reported Monday.

Soiurce: MarketWatch