US stocks tread water ahead of Fed meeting

A trader walks on the floor of the New York Stock Exchange at the market open in New York, October 28, 2013. US stocks Monday ended a quiet day essentially flat ahead of a two-day US Federal Reserve policy meeting that concludes Wednesday. -- PH
A trader walks on the floor of the New York Stock Exchange at the market open in New York, October 28, 2013. US stocks Monday ended a quiet day essentially flat ahead of a two-day US Federal Reserve policy meeting that concludes Wednesday. -- PHOTO: REUTERS 

NEW YORK (AFP) - US stocks on Monday ended a quiet day essentially flat ahead of a two-day US Federal Reserve policy meeting that concludes on Wednesday.

The Dow Jones Industrial Average slipped 1.35 points (0.01 per cent) to 15,568.93.

The broad-based S&P 500 tacked on 2.34 (0.13 per cent) at 1,762.11, a new all-time high, while the tech-rich Nasdaq Composite Index fell 3.23 (0.08 per cent) to 3,940.68.

All three indices traded in a fairly narrow range throughout the session amid relatively little news.

However, investors were gearing up for Apple's after-market earnings release. The tech giant reported earnings fell 8.6 per cent to US$7.5 billion (S$9.3 billion) for its fiscal fourth quarter. Shares were down 2.6 per cent in after-hours trading.

The Fed's Federal Open Market Committee kicks off a two-day monetary policy meeting on Tuesday. Although the FOMC is expected to maintain its US$85 billion a month asset-purchase program unchanged, investors will be watching for clues about when the pullback might begin.

Monday's bland trade was typical of days ahead of Fed meetings, said Michael Gayed, chief investment strategist at Pension Partners.

"This entire year has shown that nothing matters except (Fed Chairman) Ben Bernanke so everything is put on hold when you have a Fed meeting ahead," Gayed said.

Some technology companies that have enjoyed huge increases in 2013 retreated due to profit-taking. These included Facebook (down 3.3 per cent), Netflix (down 4.3 per cent) and electric-car manufacturer Tesla (down 4.0 per cent).

Procter & Gamble and Coca-Cola, two Dow components that fell after reporting earnings last week, were among the biggest winners in the index. P&G rose 1.6 per cent while Coke jumped 1.5 per cent.

Dow component Merck lost 2.6 per cent after earnings fell 35 per cent from the year-ago level and revenues slightly lagged expectations. The company announced earlier this month it was cutting 8,500 jobs.

Bristol-Myers Squibb shot up 6.7 per cent after announcing promising test results on clazakizumab, which is used to treat rheumatoid arthritis.

Morgan Stanley upgraded Bristol-Myers to "overweight" on the basis of promising cancer treatments the company is developing.

Bond prices fell slightly. The yield on the 10-year US Treasury rose to 2.51 per cent from 2.50 per cent on Friday, while the 30-year increased to 3.60 per cent from 3.59 per cent. Bond prices and yields move inversely.