* Fed's policy committee to start two-day meeting
* CPI, housing starts data on tap
* Futures up: Dow 31 pts, S&P 1.4 pts, Nasdaq 5 pts
By Rodrigo Campos
NEW YORK, June 18 (Reuters) - U.S. stock index futures edged
higher on Tuesday, trading in a tight range ahead of the start
of a highly anticipated Federal Reserve meeting and before
inflation and housing market data.
The Fed's policy-setting Federal Open Market Committee
starts a two-day meeting Tuesday and markets are on tenterhooks
as traders try to anticipate the Fed's timeline for winding down
a bond-buying program that has been fundamental for price moves
in various markets.
Speculation over the meeting has shaken markets
significantly after Fed Chairman Ben Bernanke said in May the
Fed could scale down its stimulus if the U.S. economy gains
momentum, comments that brought the equities rally to a halt.
Inflation and housing market data expected before the
opening bell will help traders gauge the Fed's maneuvering space
ahead of the meeting.
"We're still thinking the Fed worries somewhat about
deflation and that's why CPI is so important," said Kim Forrest,
senior equity research analyst at Fort Pitt Capital Group in
"People are expecting housing starts to be up strongly, and
that could lift markets, but they're mostly going to sit around
and wait for the Fed to announce something tomorrow," she said.
S&P 500 futures rose 1.4 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 rose 31
points, and Nasdaq 100 futures added 5 points.
Boeing launched a larger version of its flagship
Dreamliner aircraft at the Paris Airshow on Tuesday, sharpening
the battle with rival Airbus in the market for
fuel-efficient, long-distance jets. Boeing shares ticked up 0.4
percent in light premarket trading.
U.S.-traded shares of Sony rose 3.7 percent to
$21.49 as New York-based hedge fund Third Point said it has
raised its stake in the Japanese company and urged its
leadership to create an independent board to run a partially
spun-off entertainment arm.
The Labor Department releases its May Consumer Price Index
(CPI) at 8:30 a.m. EDT (1230 GMT). Economists in a Reuters
survey expect a 0.2 percent rise compared with a 0.4 percent
drop in April. Excluding food and energy, CPI is seen up 0.2
percent compared with a 0.1 percent rise in April.
Also at 8:30 a.m. (1230 GMT) the Commerce Department
releases housing starts and permits for May. Economists forecast
a 950,000 annualized rate in May versus 853,000 in April.