After moving sharply lower over the two previous sessions, stocks may show a lack of direction in early trading on Wednesday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures up by just 1 point.
Traders may be reluctant to make significant moves ahead of the Federal Reserve’s highly anticipated monetary policy announcement this afternoon.
With recent data showing inflation at persistently elevated levels, Fed is widely expected to accelerate its timetable for reducing bond purchases.
Reports suggest the Fed could double the rate it is reducing its asset purchases to $30 billion per month from the 15 billion per month announced at its previous meeting in November.
Many traders expect the Fed to begin raising interest rates shortly after bringing its asset purchase program to a halt next year.
Reflecting the focus on the Fed, traders have largely shrugged off some key U.S. economic data, including a Commerce Department report showing retail sales rose by much less than expected in November.
The Commerce Department said retail sales edged up by 0.3 percent in November after soaring by an upwardly revised 1.8 percent in October.
Economists had expected retail sales to increase by 0.8 percent compared to the 1.7 percent spike originally reported for the previous month.
Excluding sales by motor vehicle and parts dealers, retail sales still rose by 0.3 percent in November after surging by 1.8 percent in October. Ex-auto sales were expected to jump by 1.0 percent.
Meanwhile, the Labor Department released a report showing U.S. import prices increased in line with economist estimates in the month of November.
The Federal Reserve Bank of New York also released a report unexpectedly showing a modest acceleration in the pace of growth in regional manufacturing activity in the month of December.
Following the sharp pullback seen on Monday, stocks saw further downside during trading on Tuesday. With the drop, the S&P 500 continued to give back ground after ending last Friday’s trading at a record closing high.
The major averages climbed well off their worst levels of the day but remained in negative territory. The Dow dipped 106.77 points or 0.3 percent to 35,544.18, the Nasdaq tumbled 175.64 points or 1.1 percent to 15,237.64 and the S&P 500 slid 34.88 points or 0.8 percent to 4,634.09.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while China’s Shanghai Composite Index fell by 0.4 percent.
The major European markets have also turned mixed on the day. While the U.K.’s FTSE 100 Index is down by 0.2 percent, the German DAX Index is up by 0.4 percent and the French CAC 40 Index is up by 0.6 percent.
In commodities trading, crude oil futures are slumping $0.80 to $69.93 a barrel after falling $0.56 to $70.73 a barrel a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,772, down $0.30 compared to the previous session’s close of $1,772.30. On Tuesday, gold slid $16.
On the currency front, the U.S. dollar is trading at 113.85 yen compared to the 113.70 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1269 compared to yesterday’s $1.1259.
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