|09-17-2014, 02:35 PM||#1|
Wall Street looking flat ahead of Fed meeting
Investors are keeping to the sidelines ahead of the Federal Open Market Committee’s decision later today.
They will be watching for clues on when the Fed expects to begin raising interest rates, listening to hear whether the hike could come sooner than expected.
The Fed has been holding down the federal funds rate near zero since the financial crisis, but a strengthening economy has lead to speculation that it will raise rates sooner than later. Most analysts predict the first rate hike will occur next summer.
In a worst case scenario, the Fed would raise rates too quickly, and the move would derail the stock market rally and the U.S. economy, as there are still many indicators that the economy Is still not ready for policy normalization.
Keep an eye on the Fed`s policy statement Wednesday. The precise wording matters.
In previous statements, the Fed has said it intends to keep rates low for a "considerable time" until the job market improves and as long as inflation remains in check. If the Fed forgoes those two words, analysts say the markets could sell off as investors brace for a jump in rates.
U.S. stock futures were barely moving ahead of the open.
-Futures on the Dow Jones Industrial Average gained 0.029% to 17059
-Futures on the S&P 500 index gained 0.005% to 1991.60
-Futures on the NASDAQ 100 fell 0.068% to 4055.50 . As of 07:53 a.m. ET
In the previous trading session, U.S. stocks closed with gains. The Dow Jones industrial average rose 100 points and the S&P 500 and NASDAQ were both up by 0.8%.
European markets were making broad gains in early trading. However, the FTSE 100 in London was dragging its feet. British markets have been weighed down lately as investors worry that Scotland may break away from the United Kingdom.
China`s main indexes chalked up gains after it was reported that the central bank pumped about $81 billion into the banking system to support growth.
Adobe was the main mover in premarket trading. Shares were declining by about 4% after investors expressed disappointment with the firm`s latest set of quarterly results.
In Tokyo, Sony announced after the markets closed that it would lose about $2.1 billion this year as its smartphone business bleeds.
FedEx and General Mills will report earnings before the opening bell. Pier 1 Imports will report after the close.
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