WASHINGTON (REUTERS) - US stocks were little changed in morning trading on Tuesday (Sept 19) as investors avoided taking major bets ahead of the two-day Federal Reserve meeting that is expected to roll out a plan to pare the central bank's bond holdings.
The Dow, however, managed to climb to a fresh record after open, helped by Chevron's 0.9 per cent rise. Investors do not expect the central bank to increase interest rates in the meeting but will closely watch Fed Chair Janet Yellen's views on inflation, which remains stuck below the Fed's 2-per cent target rate.
"If I'd be watching anything, it would be primarily with regard to their plans to raise rates in December, which now the market has a 50-50 odds on," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
However, the biggest determinant of a rate hike in December will be how the equity and bond markets react to the reduction of the Fed's bond portfolio, said Mr Frederick. Any reduction in the balance sheet could make it harder for banks and investors to borrow certain Treasuries in the repurchase agreement market, making it more difficult and expensive to bet on or protect against interest rate increases.
Investors are also watching U.S. President Donald Trump's speech at the United Nations General Assembly where he is expected to urge U.N. member states to increase pressure on North Korea to give up its nuclear weapon ambitions.
At 9:38 a.m. ET (9:38 p.m. Singapore time), the Dow Jones Industrial Average was up 21.79 points, or 0.1 per cent, at 22,353.14, the S&P 500 was up 1.13 points, or 0.04 per cent, at 2,505 and the Nasdaq Composite was up 4.18 points, or 0.06 per cent, at 6,458.82. Five of the 11 major S&P sectors were higher, led by 0.33 per cent gain in the energy index as oil prices edged up to trade close to five-month highs. Advancing issues outnumbered decliners on the NYSE by 1,386 to 1,005. On the Nasdaq, 1,248 issues rose and 977 fell.