* Futures up: Dow 111 pts, S&P 12 pts, Nasdaq 30.25 pts
By Tanya Agrawal
Dec 16 (Reuters) - U.S. stock index futures were higher on Wednesday ahead of a widely expected hike in interest rates by the Federal Reserve later in the day.
* The Fed will announce the outcome of its policy meeting at 2 p.m. ET (1900 GMT), followed by a press conference by Chair Janet Yellen at 2:30 p.m. ET.
* An increase in the Fed's benchmark rate, from near zero, would be the first since June 29, 2006.
* After more than a year of posturing and a couple of false starts, the U.S. central bank is seen raising its rates by a token 25 basis points.
* Traders see an 81.4 percent chance of a rate hike, according to the CME Group's FedWatch tool.
* The Fed is expected to move gradually on subsequent rate hikes after the initial liftoff, according to a Reuters poll. That will help soothe jittery markets, which have been roiled recently by a rout in crude oil prices and a fall in the Chinese yuan.
* Higher interest rates make loans more expensive, crimping profit margins. Banks, however, will benefit from higher rates.
* The rate hike will be a highly symbolic move, coming exactly seven years to the day since the U.S. central bank cut them to zero as the financial crisis engulfed the world.
* The Fed has said it will raise rates when it sees a sustained recovery in the economy. While the unemployment rate has fallen to multi-year lows, inflation remains stuck below the Fed's 2 percent target.
* U.S. stocks rose broadly on Tuesday, helped by a rally in the financials and energy sectors, but ended far off their session highs.
* "We expect the start of policy normalization to serve as a catalyst for normalization of the investment environment," Mike O'Rourke, chief market strategist at Jones Trading, said in a note, adding that the prolonged period of extremely accommodative monetary policy has distorted investment objectives.
* Valeant shares were down 3.4 percent at $105.90 in premarket trading after the Canadian drugmaker cut its fourth-quarter profit forecast.
* Dow component Disney was up 1.2 percent at $113.50 as the newest installment of "Star Wars" hit screens worldwide.
Futures snapshot at 6:27 a.m. ET:
* Dow e-minis were up 111 points, or 0.64 percent, with 24,321 contracts changing hands.
* S&P 500 e-minis were up 12 points, or 0.59 percent, with 152,453 contracts traded.
* Nasdaq 100 e-minis were up 30.25 points, or 0.66 percent, on volume of 19,107 contracts. (Reporting by Tanya Agrawal and Abhiram Nandakumar; Editing by Anil D'Silva)