Federal Reserve officials in the United States are expected to announce a programme for monetary easing in a bid to assist the sputtering US economy.

Global stocks and crude oil prices rose today as investors, waiting to see if the Federal Reserve will move, mostly shrugged off Italy's credit rating downgrade.

Risk aversion eased a bit even as economic news and data remained gloomy with German investor sentiment dropping to its lowest level in nearly three years and data showing US housing starts fell more than expected in August.

At the two-day meeting that starts today, the Fed is expected to try to push already-low long-term interest rates even lower by tilting toward longer-duration bonds in its portfolio, a move known as Operation Twist.

Equity futures shrugged off Standard & Poor's downgrade of Italy's credit rating by one notch, an unexpected move that increased strains on the debt-stressed euro zone.

Futures dipped, however, after data showed US housing starts declined more than expected in August as groundbreaking for both single-family and multi-family units decreased.

"They missed and revised down. It's bad that the housing market is not only bad, but still missing low expectations," said Sal Catrini, a managing director for equities at Cantor Fitzgerald & Co in New York. "Obviously the market has been ignoring bad news and has been rallying. We were oversold and this is a continuation of what we've seen over the past week."

Agencies