Premarket, futures are up as we await word from the Fed. Gainers this morning include TRIP (10.07%), DLTR, DD, HES and WDC while losers include STX (-4.93%), LLY, TXN, CTXS and WMB.

The Market

Fed officials are expected to expand the third round of its bond-buying program by adding Treasuries to it current monthly purchase of $40 billion in mortgage-backed securities when Operation Twist concludes Dec. 31. Under Twist, the Fed has been selling short-term Treasuries it already owns in order to buy $45 billion a month in longer-term bonds, aiming to lower long-term interest rates without having to increase the dollar amount of the assets on its books.

The Fed’s policy announcement is due at 12:30 pm ET. The central bank’s new economic forecasts will be later in the afternoon, and Fed chairman Ben Bernanke will take questions at a news conference at 2:15 pm ET.

The fiscal cliff is still bearing down upon us.

European markets are mixed and Asian markets closed higher.

The national average price of gasoline is down 1.3 cents to $3.315 per gallon. Quite a deal from a few months ago.

Earnings Reports

Earnings reports (estimates): COST-Costco Wholesale ($0.93), JOY-Joy Global (1.91), RH-Restoration Hardware (0.03). Looks like Costco reported 96 cents.

Financial Calendar

0700 ET Weekly MBA mortgage applications, previous +4.5% with purchase sub-index +0.1% and refi sub-index +6.1%.

0830 ET Nov import price index expected -0.5% m/m and -1.0% y/y, Oct +0.5% m/m and +0.4% y/y.

1030 ET DOE Weekly Petroleum Status Report.

1230 ET FOMC 2-day meeting concludes with policy announcement.

1300 ET Treasury auction of $21 billion in 10-year T-notes.

1400 ET Nov U.S. monthly budget statement expected -$150 bln, previous -$137.3 bln.

1400 ET FOMC releases projections of economy and federal funds rate.

1415 ET Fed Chairman Bernanke holds press conference.