Futures trading on Wall Street is subdued today following big gains on North American markets yesterday in the wake of the U.S. Federal Reserve’s decision to leave interest rates unchanged.

On Tuesday the S&P/TSX composite index climbed 50.08 points to 7,625.37. On Wall Street, the Dow Jones industrial average rose 118.53 points to 9,567.34. The Nasdaq composite index gained 41.55 points to 1,887.25. The S&P 500 index rose 14.51 points or 2.3% to 1,029.32.

The only economic data out this morning is a report from the U.S. Commerce Department on housing starts, but it had little effect on futures trading.

Home-building dropped off in August, down from a 17-year high in July as the sector has begun to show signs of cooling, says Commerce. U.S. housing starts dropped 3.8% following an increase of 2.6% in July, the highest since April 1986. But building permits, a reflection of future building activity, rose 4.8%.

American markets will be facing bad news from two big cigarette-makers, R.J. Reynolds Tobacco Holding and Altria. R.J. Reynolds unveiled plans to cut the work force at its R.J. Reynolds Tobacco Co. unit by 40%, or 2,600 jobs, as part of a restructuring aiming for US$1 billion in cost cuts by the end of 2005. The company said it expects a third-quarter pretax charge of US$340 million.

Meanwhile, Altria, owner of Philip Morris, has learned that the Illinois Supreme Court will hear its appeal of a US$10.1 billion verdict for allegedly misleading smokers about the dangers of light cigarettes. Altria must post US$6.8 billion while it appeals the class action case.

Yesterday’s Fed announcement had a positive effect on trading in Japan. The Nikkei hit a 15-month high, gaining 103.08 points to 10,990.11. Hong Kong stocks finished slightly higher as blue-chip and property gains outweighed the impact of a false alarm involving a suspected case of SARS.

The Fed’s announcement came after the European markets had closed. At midday, today, London’s FTSE 100 index is up slightly, just 5.2 points to 4,304.2. Frankfurt’s DAX is up 0.7% and Paris has gained 0.5%.