NEW YORK (AP) — Nobody wanted to stick their neck out on Tuesday.
The stock market edged slightly lower as the Federal Reserve started a two-day policy meeting that may herald the beginning of the end for its economic stimulus.
Few expect that the Fed will announce that it plans to pare back, or ‘taper,’ its huge bond-buying program after its meeting wraps up on Wednesday. However, good news on the U.S. economy this month, including a blockbuster jobs report, and a budget deal in Washington appeared to have increased the likelihood of a change.
“It’s just the taper drama, that’s really all the market seems focused on,” said Dean Junkans, CIO for Wells Fargo Private Bank. “The chances of them doing something tomorrow are higher than they were a month ago.”
Major stock indices fell, but just slightly. The Standard & Poor’s 500 index eased five points, or 0.3 percent, to 1,781. The Dow Jones industrial average crept down nine points, or 0.1 percent, to 15,875.26. The Nasdaq composite edged lower by five points, or 0.1 percent, to 4,023. 68.
Eight of the ten industrial groups in the S&P 500 declined, led by phone companies. Materials stocks and technology companies edged higher.
A couple of big companies bucked the downward trend after pledging to hand more cash to stock holders.
Boeing rose $1.16, or 1 percent, to $135.88 after the plane maker increased its stock buyback program by $10 billion and raised its dividend 52 percent. 3M climbed $3.73, or 3 percent, to $131.39 after raising its dividend by 35 percent. The company also forecast solid earnings next year.
Stocks have surged this year as the Fed kept buying $85 billion in bonds every month to hold down long-term interest rates. As well as boosting the economy, that stimulus has made stocks a more attractive investment compared to bonds.
The only setbacks for the market this year have come when investors were nervous that the Fed was about to cut back its stimulus.