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Wall Street pares losses ahead of Fed policy outcome

English.news.cn   2013-12-18 06:21:37            

NEW YORK, Dec. 17 (Xinhua) -- U.S. stocks trimmed part of earlier losses in a narrowly fluctuating session Tuesday, as investors were awaiting the outcome of the Federal Reserve's two- day policy meeting due out Wednesday afternoon.

The Dow Jones Industrial Average lost 9.25 points, or 0.06 percent, to 15,875.32. The S&P 500 gave up 5.55 points, or 0.31 percent, to 1,780.99. The Nasdaq Composite Index slipped 5.84 points, or 0.14 percent, to 4023.68.

The blue-chip Dow and tech-rich Nasdaq ended slightly lower after toggling in and out of negative territory as investors were reluctant to make big bets a day before the Fed make its decision on the fate of the massive bond buying program.

A budget deal in Congress and robust economic data released recently have increased the odds that the U.S. central bank may start dialing back its monthly 85-billion-dollar asset purchases at the meeting concludes.

Most traders, however, predict that the U.S. equity market would not respond too negatively to a tapering decision, though a kneel-jerk reaction may follow.

On the economic front, the U.S. Consumer Price Index was unchanged in November on a seasonally adjusted basis following a 0. 1-percent decline in the prior month, said the Labor Department.

Analysts believe that persistently low inflation could complicate matters for the Fed which is ready to start moderating the pace of its bond purchases.

"There is little upward price pressure anywhere in the economy, " said Jay Morelock, senior economist at FTN Financial, in a note Tuesday.

He added that both sides of the Fed's dual mandate call for further stimulus, not less, with benign prices and a tepid labor market.

Meanwhile, U.S. builder confidence in the market for newly built, single-family homes improved 4 points to 58 in December, according to the National Association of Home Builders/Wells Fargo Housing Market Index released Tuesday.

Moreover, the U.S. current account deficit -- the combined balances on trade in goods and services, income, and net unilateral current transfers -- shrank to 94.8 billion dollars in the third quarter, the lowest level in four years, the Commerce Department said Tuesday.

The U.S. stocks rose sharply on Monday, witnessing a relief rally after major indices fell for two consecutive weeks.

The CBOE Volatility Index, widely considered as a fear gauge of the market, was up 1.06 percent to end at 16.20.

In other markets, oil prices fell Tuesday on profit taking. Light, sweet crude for January delivery lost 26 cents to settle at 97.22 dollars a barrel on the New York Mercantile Exchange, while Brent crude for January delivery moved down 97 cents to close at 108.44 dollars a barrel.

Gold futures on the COMEX division of the New York Mercantile Exchange lost ground Tuesday, with the most active gold contract for February delivery shedding 14.3 dollars to settle at 1,230.1 dollars per ounce.

The U.S. dollar was little changed against major currencies on Tuesday. In late New York trading, the euro rose to 1.3767 dollars from 1.3764 dollars in the previous session, and the British pound decreased to 1.6265 dollars from 1.6302 dollars.

Editor: Mu Xuequan
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