LONDON (ShareCast) - Wall Street edges higher at the outset with most investors keeping their powder dry ahead of the US interest rate decision due to be announced tomorrow. At varying points in the last few days the consensus on the Fed’s decision has ranged from a “certain” half point cut, to no cut and now to somewhere in between, namely a quarter point cut.

The major indices all advance hesitantly, with the Dow-Jones 30 up 25 at 12,409 while the broader based S&P Composite is 3 points higher at 1,357. The NASDAQ Composite is virtually unchanged at 2,350.

Market sentiment was enhanced by news that US durable goods orders rose much more than expected in December. The index of new durable goods orders rose 5.2% in December, and was up 2.6% excluding transportation orders. Economists had expected a rise of 1.6% or no change when transportation orders are excluded.

Company announcements have been coming out thick and fast, with Lexmark, Valero Energy and Countrywide Financial all firmer on the back of results, while Smith International, EMC and US Steel are at the other end of the scale, having been marked lower following earnings updates.

Printer company Lexmark is in the blue after announcing fourth quarter net earnings of $99 million, or $1.04 a share. Excluding restructuring charges EPS was $1.29; analysts had been expecting EPS in the region of 58 cents.

Valero Energy was another stock boosting its “earnings surprise” rating, as its EPS for the fourth quarter came in way ahead of analysts’ forecasts, at $1.02 compared with a market consensus of 64 cents. The oil refiner’s fourth quarter net income from continuing operations was down at $567m from $1.08bn ($1.74 a share) in Q4 2006, although the previous year’s figures included a gain of 21 cents a share from the disposal of its stake in NuStar GP Holdings.

Crippled mortgage lender Countrywide Financial was wanted, despite slumping into the red in the fourth quarter. The nation’s largest mortgage lender suffered a fourth quarter loss of $422m, compared with a gain of $622m in the final quarter of 2006. The company’s provision for credit losses shot up to $924m. compared with $73m in the fourth quarter of 2006/

On the downside, oil field services company Smith International is the worst performing S&P 500 stock, after announcing post-tax fourth quarter earnings that were 17% higher than a year ago at $167m, or 83 cents a share. However, the company said it failed to improve margins in the fourth quarter and confessed that the results were “on the lower-end of our fourth quarter expectations.”

Information management company EMC backtracked after it forecast slower revenue growth for 2008.

US Steel dived lower after revealing sharply lower fourth quarter net income of $35m, compared with net income of $269m in the third quarter and $297m in the fourth quarter of 2006.

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