By Mark DeCambre and Sara Sjolin, MarketWatch
Dollar flat as investors await Federal Reserve call
U.S. stock benchmarks switched between small gains and losses
Wednesday morning as investors traded skittishly ahead of the
Federal Reserve's monetary-policy update.
Although Wall Street isn't expecting any change to rates,
investors will be looking for clarity on the Fed's projection for
futures rates and what's expected to be the launch of its $4.5
trillion asset-portfolio unwind.
The Dow Jones Industrial Average was little changed, up 19
points, or less than 0.1%, at 22,389, with shares of Apple Inc.
(AAPL), weighing on the benchmark after it reportedly admitted
(http://www.marketwatch.com/story/apple-admits-issues-with-apple-watch-connectivity-stock-falls-2017-09-20)
there are issues with connectivity of its new Apple Watch Series 3.
Shares of Boeing Co. (BA) and McDonald's Corp. (MCD) were helping
offset some of that decline to a fresh intraday record at
22,399.33.
The S&P 500 index was up about a point at 2,508, after
briefly touching its own fresh intraday day record at 2,508.85.
Gains in financials, up 0.5% and telecommunication, 0.6% higher,
helped lift the broad-market gauge, while technology, off 0.9% and
consumer staples, down 0.2%, were the only sectors firmly trading
in the red.
The Nasdaq Composite Index , meanwhile, was 9 points, or 0.%,
lower at 6,453, pressured, in part, by Apple's slide.
The mostly subdued trading environment, marked by low trading
volumes, comes after all three main benchmark posted small gains
and ended at all-time highs on Tuesday
(http://www.marketwatch.com/story/us-stocks-aim-for-fresh-records-as-fed-meeting-steals-focus-2017-09-19).
The Dow average climbed 0.2%, while the S&P 500 and Nasdaq
Composite Index both ended 0.1% higher.
"Financial markets are consolidating this morning, with all eyes
on the Fed as the [Federal Open Market Committee] conclude their
two-day meeting with the announcement of monetary policy," said
Richard Perry, market analyst at Hantec Markets, said in a
note.
The wait for Fed news also comes as investors gear up for
third-quarter results at the end of the month, which could provide
further direction for markets.
"To me, the muted markets of the last few days are mainly a
result of a lack of new market moving news. We're in between
[third-quarter] earnings seasons so corporate news flow is light,"
said Colin Cieszynski, chief market strategist at CMC Markets.
Read:Why stock market investors shouldn't sweat a shrinking Fed
balance sheet
(http://www.marketwatch.com/story/why-stock-market-investors-shouldnt-sweat-a-shrinking-fed-balance-sheet-2017-09-19)
The announcement is due at 2 p.m. Eastern Time, followed by a
news conference with Chairwoman Janet Yellen at 2:30 p.m.
Eastern.
Any announcement about reducing the Fed's balance-sheet
normalization should have only a relatively muted impact on
markets, given that the market largely expects it, said analysts at
Rabobank in a note.
Some industry participants, however, have been describing the
asset reduction as the "great unwind
(http://www.marketwatch.com/story/how-the-great-central-bank-unwind-could-ignite-the-next-financial-crisis-2017-09-20)"
and worrying that it might roil markets. "It is the start of
something unknown, it is going to start jitters. It is going to
make us tremble," said John Manley, chief equity strategist at
Wells Fargo Funds Management.
However, the Fed is aiming to offer as little disruption as
possible, he noted.
"I expect Janet Yellen to have as little impact on sentiment as
she can," " think what she's going to give us a sense of is that
she's very much aware of the risks involved," Manley said.
Several central-bank officials already wanted to start winding
down the Fed's portfolio of government securities in July, but the
majority wanted to hold until a later date. Traders now expect the
FOMC on Wednesday to reveal details on a balance-sheet reduction
(http://www.marketwatch.com/story/feds-balance-sheet-unwind-will-be-moment-of-truth-for-financial-markets-2017-09-18)
that could start as early as October.
The dollar traded slightly lower against most other currencies
ahead of the announcement. The ICE Dollar Index was flat at 91.753,
trying to snap a two-day skid.
In other economic news on Wednesday, a reading on existing-home
sales for August showed that sales dropped for the fourth time in
five months as real-estate agents continue to blame a lack of
available homes to buy. The National Association of Realtors said
existing home sales fell
(http://www.marketwatch.com/story/existing-home-sales-fall-in-august-for-the-fourth-time-in-five-months-2017-09-20)1.7%
to a seasonally adjusted rate of 5.35 million.
See:MarketWatch's economic calendar
(http://www.marketwatch.com/economy-politics/calendars/economic).
Stock movers: Shares of General Mills Inc.(GIS) slid 5% after
the food company, which brands include Cheerios, Haagen-Dazs and
Betty Crocker, missed profit and sales expectations
(http://www.marketwatch.com/story/general-mills-stock-tumbles-after-profit-and-sales-miss-2017-09-20).
Alnylam Pharmaceuticals Inc. (ALNY) soared 40% after positive
results in a late-stage trial
(http://www.marketwatch.com/story/sanofi-alnylam-report-positive-results-from-late-stage-trial-of-hattr-amyloidosis-treatment-2017-09-20).
Shares of American Outdoor Brands Corp.(AOBC) declined 3.6%,
despite reports late Tuesday that President Donald Trump will ease
rules on gun exports.
Bed Bath & Beyond Inc.(BBBY) slumped more than 14% ahead of
the bell after the retailer late on Tuesday released earnings that
widely missed forecasts
(http://www.marketwatch.com/story/bed-bath-beyond-earnings-miss-widely-stock-halted-2017-09-19).
FedEx Corp.(FDX) added 2.2% after the logistics company late
Tuesday reported earnings below forecasts
(http://www.marketwatch.com/story/fedex-shares-down-after-earnings-company-pins-miss-on-cyberattack-hurricane-harvey-2017-09-19),
saying the quarter offered "significantly operational challenges"
due to a cyberattack and Hurricane Harvey.
Microsoft Corp. (MSFT) slipped less than 0.8%, even as the
software major late Tuesday increased its dividend to 42 cents a
share
(http://www.marketwatch.com/story/microsoft-hikes-quarterly-dividend-announces-changes-to-board-of-directors-2017-09-19).
Other markets: Stocks in Europe were mostly higher, although the
U.K.'s FTSE 100 index
(http://www.marketwatch.com/story/ftse-100-edges-up-as-fed-decision-takes-center-stage-2017-09-20)underperformed
due to a rise in the pound. Sterling strengthened after U.K. retail
sales for August showed a bigger rise than expected
(http://www.marketwatch.com/story/uk-retail-sales-rise-faster-than-expected-2017-09-20).
Asian stocks closed mixed
(http://www.marketwatch.com/story/asian-markets-press-pause-ahead-of-fed-announcement-2017-09-19)
as traders there remained cautious ahead of the Fed call.
Crude-oil prices rose firmly
(http://www.marketwatch.com/story/crude-prices-rise-on-signs-of-drop-in-global-inventories-2017-09-20)
to $50.81 a barrel, while metals gained across the board, with gold
futures trading at around $1,316 an ounce, heading for the first
gain in the past four session
(http://www.marketwatch.com/story/gold-prices-pause-losing-skid-as-fed-signals-awaited-2017-09-20)s.
(END) Dow Jones Newswires
September 20, 2017 13:50 ET (17:50 GMT)
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