The U.S. Federal Reserve looks set to keep monetary policy on hold on Wednesday, even as it releases forecasts expected to show interest rates will be near zero for at least two more years.

Roche Holding AG (ROG.VX) is offering $5.7 billion in cash to buy U.S. gene sequencing company Illumina Inc (ILMN.O) in a hostile takeover bid that marks a major play by the Swiss drugmaker into the gene technology field.

Apple Inc's (AAPL.O) quarterly results blew past Wall Street's expectations after U.S. consumers snapped up near-unprecedented numbers of iPhones and iPads, sending its shares up 8 percent into record territory. Apple shares listed in Frankfurt (AAPL.F) rose 6.6 percent.

U.S. President Barack Obama used his last State of the Union speech before the November election to paint himself as the champion of the middle class, by demanding higher taxes for millionaires and tight reins on Wall Street.

The Mortgage Bankers Association releases at 7 a.m. ET Weekly Mortgage Market Index for the week ended January 20, versus the prior week. The mortgage market index read 816.1 and the refinancing index was 4,500.6 in the previous week.

National Association of Realtors issues at 10 a.m. ET Pending Home Sales for December. Economists expect a 1.0 percent fall compared with a 7.3 percent rise in the previous month.

Nordic budget carrier Norwegian Air Shuttle (NWC.OL) ordered 222 narrow-body aircraft worth a total of $21.5 billion at list prices on Wednesday. It split its order between Boeing Corp (BA.N) and Airbus, part of EADS (EAD.PA).

U.S. oil giant Exxon Mobil (XOM.N) resumed work on Wednesday at its $15.7 billion liquefied natural gas (LNG) project in Papua New Guinea, a spokeswoman said, a day after a landslide swept through two nearby villages killing at least four people.

United Technologies (UTX.N) announces results, which Wall Street expects will show profit rose to $1.46 per share from $1.31 per share. Textron TXT.L , the world's top maker of corporate aircraft, is expected to post a 3 percent rise in earnings, factoring out one-time items.

Boeing (BA.N), the world's largest aerospace and defense company, is set to report a sharp decline in fourth-quarter profit. Other companies announcing results include Abbott Laboratories (ABT.N), Automatic Data Processing (ADP.O) and Xerox (XRX.N).

European shares .FTEU3 fell 0.6 percent on Wednesday, weighed by the tech sector after a sharp post-results decline for mobile telecoms network gear maker Ericsson (ERICb.ST).

U.S. stocks edged lower on Tuesday, ending a five-day rally for the S&P 500 .SPX, as talks to resolve Greece's debt crisis hit a snag and earnings from a number of blue-chips disappointed investors.

The Dow Jones industrial average .DJI finished down 33.07 points, or 0.26 percent, at 12,675.75. The Standard & Poor's 500 Index was down 1.37 points, or 0.10 percent, at 1,314.63. The Nasdaq Composite Index .IXIC rose 2.47 points, or 0.09 percent, to 2,786.64.

(Reporting by Atul Prakash; Editing by Erica Billingham)

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