Athens Bans Short Selling, Treasury to Auction 5s, FOMC Statement

Stock futures are recovering a portion of yesterday's losses this morning after a sharp sell-off in the final hour of trading Tuesday. No major economic data is scheduled for release, so investors will be devoting their attention to events in Europe until the Federal Reserve releases its latest monetary policy statement in the mid-afternoon.

Two hours ahead of the opening bell, Dow futures are up 28 points to 10,983 and S&P 500 futures are trading 3.75 points higher at 1,184.75. The 2 year Treasury note is -0-02 at 99-30 yielding 1.028% and the 10 year note is -0-11 at 99-03 yielding 3.734%.

Commodities, by contrast, are pointing downwards: WTI crude oil is off 38 cents to $82.06 per barrel, while Spot Gold is off $3.95 to $1,163.90.

In yesterday’s session, the Dow shed 213 points and the S&P 500 dropped 28.3 points. The market’s final minutes were key as investors reacted to Standard & Poor's slashing the credit ratings of Greece and Portugal.

“Greece's economic and fiscal prospects lead us to conclude that the sovereign's creditworthiness is no longer compatible with an investment-grade rating,” said S&P as it placed Greek debt into junk status. Meantime, Portuguese debt was cut two notches and left with a negative outlook. 

Earlier today in the European session, Greek regulator banned short-selling on the Athens stock exchange for a period of two months starting today. That alone will keep attention on Greece this morning.

Meanwhile, a flight-to-quality is sending cash to the US dollar, which has risen in 9 of the past 10 sessions. 

The FOMC meeting announcement later today is unlikely to produce any major revelations. In a speech yesterday, chairman Ben Bernanke focused on fiscal responsibility.

“The reality is that the Congress, the Administration, and the American people will have to choose among making modifications to entitlement programs such as Medicare and Social Security, restraining federal spending on everything else, accepting higher taxes, or some combination thereof,” he said.

Key Events Today:

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