US stocks traded mixed Wednesday ahead of a Federal Reserve policy announcement as investors hoped the Fed would take additional stimulus measures to boost the flagging economy.
After half an hour of trade, the Dow Jones Industrial Average was down 19.49 points, or 0.15 percent, at 12,817.84.
The S&P 500-stock index fell 1.94 (0.14 percent) to 1,356.04, while the tech-rich Nasdaq rose a meagre 1.01 (0.03 percent) to 2,930.77.
“The market is likely to go into a holding pattern ahead of the Fed announcement this afternoon. Then, it will all depend on what the Fed says,” said Dick Green at Briefing.com.
The central bank's Federal Open Market Committee wraps up a two-day meeting later Wednesday with a policy statement, updated economic forecasts and a news conference with Fed Chairman Ben Bernanke.
Market expectations that the Fed will provide further liquidity to the economy, by extending its bond-swap program that is due to expire at month's-end, have bolstered Wall Street in recent days.
“There is widespread expectation that the Fed will continue Operation Twist. That involves extending the maturity of the Fed's bond portfolio by buying longer-dated issues in place of shorter-term issues,” Green said.
Dow member Procter & Gamble slid 3.8 percent after lowering its fiscal fourth-quarter forecast, citing softer sales growth and negative hits from foreign exchange rate changes.
Starwood Hotels & Resorts Worldwide gained 1.2 percent. Starwood, which has 103 hotels open in China, announced it has 100
more in the pipeline.
Software company Adobe Systems dived 5.6 percent after reporting a drop in second-quarter
On Tuesday, stocks ended solidly higher after a moderately successful Spanish bond auction and on hopes for more Fed stimulus. The Dow gained 0.75 percent, the S&P 500 advanced 0.98 percent and the Nasdaq added 1.19 percent.
The bond market retreated. The yield on 10-year treasuries rose to 1.66 percent from 1.62 percent Tuesday; on the 30-year it climbed to 2.77 percent from 2.73 percent.
Bond yields and prices move in opposite directions. - Sapa-AFP