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Futures rise as investors regain confidence in the central bank's ability to ease strains in financial markets.
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See all CNNMoney.com RSS FEEDS (close) December 12 2007: 5:05 AM EST


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CNNMoney.com's Paul R. La Monica discusses Wall Street's dissappointment with the Fed's rate cut.
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LONDON (CNNMoney.com) -- U.S. stocks looked set for a higher open Wednesday, as investors overlooked their disappointment over the Federal Reserve's rate cut and focused on other moves the central bank may take to restore confidence in financial markets.

At 4:40 a.m. ET, Nasdaq and S&P futures were higher, pointing to a higher start for stocks.

Wall Street is licking its wounds after the Fed's decision sank stocks on Tuesday. The Dow plummeted nearly 300 points after the central bank cut its key short-term interest rate by a quarter of a point, disappointing investors who had hoped for a half of a percentage point cut.

But according to a report in the Wall Street Journal, Fed officials are considering other tools to encourage lending among banks and could make a move within days. Possible action could include another reduction in the discount rate, the extension of longer-term loans to money-market dealers, as well as looser collateral rules for borrowing from the Fed, the report said.

While investors have been looking to the Fed to bail out the markets from the mortgage meltdown, there is a growing sense that monetary policy alone won't be enough to solve the current crisis. In a commentary piece published in the Journal, former Fed chairman Alan Greenspan said the the current crisis will end when the housing situation recovers.

In global trade, major Asia markets retreated as investors expressed disappointment with the Fed's move. European stocks fell in early trading.