Futures fall as rate outlook clues awaited

Shares of Mattel Inc (NYSE: - ) could be in for a rocky session after the toy maker announced a third recall of Chinese-made toys, saying it would take back more than 800,000 units globally that contained impermissible lead levels.

The Fed's Beige Book report on economic conditions around the country, set for release at 2 p.m. (1800 GMT), may give clues on whether policy makers will opt for an interest rate cut at their next meeting on September 18.

The ADP National Employment figures at 8:15 a.m. (1215 GMT), a gauge of private-sector hiring, precedes Friday's non-farm payrolls report, considered one of the most important set of data for the Fed.

"The economic data is really under the microscope because of the great interest-rate debate," said Peter Dunay, investment strategist at Leeb Capital Management New York. "Employment is a major key because we continue to rely on the consumer. As much as we know the economy will slow down from housing, as long as employment holds up, it will keep the problems in credit contained."

The Fed helped quell turbulence in global stock markets with a cut in its discount rate last month and a comment by Chairman Ben Bernanke that the central bank will take the required measures to safeguard the economy from turmoil in the financial markets.

S&P 500 futures were down 9.8 points, below 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 60 points, and Nasdaq 100 futures were down 7.75 points.

On Tuesday, the Dow Jones industrial average (DJI: - ) rose 91.12 points, or 0.68 percent, to 13,448.86. The Standard & Poor's 500 Index ( - ) gained 15.43 points, or 1.05 percent, to 1,489.42. The Nasdaq Composite Index (Nasdaq: - ) added 33.88 points, or 1.30 percent, to 2,630.24.