US: Stocks dip ahead of Fed announcement

[NEW YORK] Wall Street stocks dipped early Wednesday ahead of a Federal Reserve policy decision that will signal whether the US central bank plans to accelerate its pace of interest rate hikes.

About 15 minutes into trading, the Dow Jones Industrial Average was down slightly to 24,723.88.

The broad-based S&P 500 fell 0.1 per cent to 2,714.45, while the tech-rich Nasdaq Composite Index also shed 0.1 per cent to 7,354.05.

The Fed is widely expected to raise the benchmark lending rate Wednesday. But the market is looking to see whether the central bank projects four rate increases this year, and a faster pace in 2019, which would be more than many market watchers are expecting.

"A fourth rate hike has not been priced in to a large extent," said Briefing.com analyst Patrick O'Hare.

"The uncertainty surrounding this open question is why the eventual answer is certain to be a market-moving event." However, several economists say the Fed is unlikely to signal a fourth rate increase so early in the year, although they do expect additioanl moves next year.

Meanwhile, Facebook continued its decline, falling 2.1 per cent on lingering questions over its response to a data scandal following reports that a data analysis firm hired by Donald Trump's presidential campaign misused personal information of some 50 million Facebook users.

General Mills slumped 8.6 per cent after cutting its profit forecast due to higher commodity and freight costs. The food company said it was hiring additional freight companies and cutting administrative costs to make up the difference.

Shares in the Nordstrom department store chain fell 3.5 per cent as it announced that an effort by Nordstrom family members to take the company private was being terminated due to disagreement on price.

FedEx rose 1.0 per cent as it reported earnings of US$3.72 per share, much above analyst expectations.

AFP