USA stocks close higher ahead as Fed meeting starts

USA stocks close higher ahead as Fed meeting starts”

The major averages all ended the day in negative territory.

Interest rate futures are now pricing in a 75 percent chance of a December increase, up from about 56 percent at the start of the Fed meeting on Wednesday, according to CME's FedWatch tool.

At 2:58 p.m. ET, the Dow Jones Industrial Average fell 36.4 points, or 0.16 percent, to 22,376.19, the S&P 500 lost 4.73 points, or 0.19 percent, to 2,503.51 and the Nasdaq Composite dropped 21.34 points, or 0.33 percent, to 6,434.71.

The central bank also revealed that it will begin shrinking its USD4.5 trillion balance sheet in October, initially allowing USD10 billion in bonds to roll off each month.

The report said housing starts fell by 0.8 percent to an annual rate of 1.180 million in August from a revised 1.190 million in July. Shares of smaller wireless carrier T-Mobile TMUS.O rose 5.9 percent and Sprint S.N jumped 6.8 percent, following a report they were in active merger talks.

A separate report released by the Labor Department showed increases in US import and export prices in the month of August.

The Dow fell as declines in shares of Procter & Gamble and those of Apple, recently down 2 percent and 1.4 percent respectively, outweighed gains in shares of General Electric and those of Goldman Sachs, recently up 1.4 percent and 0.9 percent respectively.

The biggest USA telephone operators, Verizon and AT&T rose more than 2 percent, helping to lift the S&P. Economists had expected the index to drop to 17.2. The VIX is also called the "fear index". The index is on pace to end the session at its lowest closing level in almost a month.

Considerable weakness is also visible among oil service stocks, as reflected by the 1.2 loss being posted by the Philadelphia Oil Service Index.

Meanwhile, the major European markets are turning in a mixed performance on the day.

The weakness among oil service stocks came amid a modest decrease by the price of crude oil, with crude for November delivery slipping USD0.14 to USD50.55 a barrel.

Semiconductor and natural gas stocks are also seeing modest weakness, while some strength has emerged among gold stocks.

The Nasdaq Composite .IXIC added 6.68 points, or 0.1 percent, to 6,461.32, also squeaking out a record closing high, slightly above its September 13 close. It moved higher in the first three trading days of the week but pulled back on Thursday.

Wall Street weakened, declining from record highs, as investors assessed the impact of the Federal Reserve's intentions to raise interest rates once more this year.

In the latest corporate deal news, shares of Calgon Carbon skyrocketed, up 62 percent as of 3.09pm in NY, after the company said it agreed to be acquired by Japan's Kuraray for US$1.1 billion. The French CAC 40 Index advanced by 0.5% and the German DAX Index climbed by 0.3%, although the UK's FTSE 100 Index edged down by 0.1%.

In the bond market, treasuries are showing a lack of direction ahead of tomorrow's announcement by the Fed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.278%.

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