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Futures higher; Fed meeting eyed

Jenny Cosgrave
Getty Images. U.S. stock index futures pointed to a sharply higher open, with Dow futures up over 100 points in pre-market trading as the all-important two-day Federal Reserve meeting gets underway.

U.S. stock index futures pointed to a higher open Tuesday amid some stabilization in oil prices as the key two-day Federal Reserve meeting was set to begin.

Dow futures recovered earlier gains of 150 points after briefly paring gains as 3M (MMM) fell more than 4.5 percent pre-market trade. The firm lowered its 2015 earnings outlook , citing continued slow growth in the global economy. The company said it now expects full-year growth of about 1 percent, compared with previous guidance of 1.5 to 2 percent.

Apple (AAPL) also weighed, briefly falling 1 percent in pre-market trade, after key supplier Dialog Semiconductor (XETRA:DLG-DE) lowered guidance for fourth-quarter revenue.

The Fed begins meeting Tuesday, and will release its post meeting statement Wednesday at 2 p.m. ET.

The central bank is widely expected to raise the fed funds rate by a quarter point Wednesday, while emphasizing that the pace of tightening will be gradual. A hike would be the first since June 2006.

U.S. stock index futures held near earlier levels after the headline November Consumer Price Index (CPI) came in unchanged, while ex-food and energy the figure rose 0.2 percent.

The Empire Manufacturing index for December showed minus 4.6, compared with November's minus 10.7 print.

The U.S. dollar index turned higher but continued to trade essentially flat against major world currencies, with the euro near $1.099 and the yen at 121.02 yen against the greenback as of 8:40 a.m., ET.

Treasury yields edged higher, with the 2-year yield at 0.97 percent and the 10-year at 2.26 percent.

The NAHB housing market index is due at 10:00 a.m. and the latest capital inflows data at 4:00 p.m.

Oil prices remain in focus, after U.S. crude (New York Mercantile Exchange: @CL.1) settled up 69 cents on Monday, or 1.94 percent, at $36.31 a barrel, pausing a six-day losing streak that took crude to its lowest in nearly seven years.

Internationally traded Brent (Intercontinental Exchange Europe: @LCO.1) pared gains to trade about 20 cents higher just above $38 a barrel, while U.S. crude turned lower to trade 10 cents lower just above $36.20 a barrel, as of 8:41 a.m., ET.

European equities traded higher Tuesday morning , buoyed by positive car registration data in the European Union, ahead of the Fed meeting. The pan-European Stoxx 600 (^STOXX) index was last up nearly 2 percent.

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Trade in U.S. stocks was volatile Monday, with the Dow Jones industrial average adding 100 points as the close approached , after earlier falling more than 100 points.

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