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All Eyes on Fed as Markets Open Lower

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LONDON -- The Dow Jones Industrial Average (INDEX: ^DJI  ) and the S&P 500 (INDEX: ^GSPC  ) may open down this morning, according to futures markets at 7 a.m. EDT.

Markets are likely to be cautious until the outcome of this month's Federal Open Markets Committee policy meeting is known. An announcement is due at 12:30 p.m. EDT, followed by a press conference with Chairman Ben Bernanke at 2:15 p.m. EDT. The Fed is widely expected to extend its low-interest rate policy until 2015, but what is less certain -- and could shift markets -- is whether a third round of quantitative easing will be announced.

Other economic data due this morning includes the latest weekly jobless claims figures, which are expected to rise to 370,000 from 365,000 the previous week. August's producer price index is also due and is expected to show a rise of 1%, up from 0.3% in July. August's federal budget is due at 2 p.m. EDT, just before Bernanke takes center stage at the FOMC press conference.

Companies that could make waves in trading today include Apple, whose shares could be heavily traded following the launch of the iPhone 5 last night. Apple shares closed slightly higher yesterday, while Pier 1 Imports is due to release results before markets open, with analysts expecting earnings of $0.19 per share on revenue of $368 million.

European markets
European markets were fairly quiet this morning ahead of today's Fed announcement (which will take place after European markets close). One big story affecting the French, German, and U.K. markets was the possible merger between BAESystems (LSE: BA.L  ) and EADS, the company which makes Airbus airliners. The deal would create a company to rival Boeing in size, with a substantial presence in both the civil and defense aerospace industries. Shares in both companies fell in trading this morning as investors expressed concerns about the structure and viability of the deal.

At 7 a.m. EDT, the DAX was down by 0.4%, the CAC was down by 0.7%, the FTSE MIB was down by 0.7%, and the IBEX was down by 1.1%. In London, the FTSE 100 (INDEX: ^FTSE  ) was just 0.1% lower. Merger candidate BAE Systems reversed yesterday's strong gains and dropped 6%, making it the biggest faller this morning, while fellow aerospace engineer Rolls-Royce was in favor and rose by 2.4%, leading the risers.

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Roland Head owns shares in BAE Systems but has no shares in any of the other companies mentioned in this article. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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