US stock futures flat; FedEx may give direction

NEW YORK, June 21 (Reuters) US stock index futures indicated a flat market open on Wednesday as investors sought clues about the strength of corporate profits from earnings of investment bank Morgan Stanley and delivery company FedEx Corp.

FedEx, the world's largest air-express carrier, reported earnings that beat analysts' estimates. For details, see ID:nWEN9833. FedEx is seen as a gauge of U.S. business activity and the health of corporate spending.

Morgan Stanley, which also beat Wall Street forecasts, may help lift investment banks after J.P. Morgan Chase&Co. was earlier downgraded by Prudential Equity Group.

''Rate worries continue to weigh on the market, but we've got oil inventories today, plus FedEx and Morgan Stanley are in focus,'' said Peter Cardillo, chief market analyst and chief strategist at SW Bach and Co. ''I think we're heading for some sort of mixed session which seems to be developing into a new lower trading range.'' S&P 500 futures were down 2.6 points, slightly above fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures fell 16 points, and Nasdaq 100 futures fell 3 points.

Ford Motor Co. fell 7 percent in European trading after Bloomberg News reported that officials at the auto maker had said it may fail to meet its goal of returning to profit in North America by 2008 because of declining sales of sport utility vehicles.

Merrill Lynch raised its rating on shares of Motorola Inc. , the world's second biggest mobile phone maker, to ''buy'' from ''neutral,'' MarketWatch reported on its Web site Wednesday. Shares of the company closed at .83 on Tuesday on the New York Stock Exchange.

Investors also will focus on weekly government oil data due at 10:30 a.m. (1430 GMT) The Energy Department data are expected to show gasoline inventories rose for the eighth straight week, increasing 1.2 million barrels.

REUTERS DKS PM1743