US stocks opened lower for a second day ahead of the conclusion of the US Federal Reserve policy meeting with investors expecting the Fed to signal a change of stance on the timing of its lending rate hike.
The Standard & Poor’s 500 index dipped 0.3% to 2067.78 at 10.40 Am in New York to continue the previous sessions decline. The US benchmark has not posted a two-day gain in March. It is now more than 2.3% below the record high it hit earlier this month.
The Dow Jones Industrial Average fell by 76 points or 0.4% to 17,774.The NASDAQ Composite slipped 14 points or 0.3% to 4,922.
Market forecasts expect the Fed to raise the interest rates for the first time since 2008 in either June or September but a robust dollar and soft economic data coming just before the policy meeting have muddied the economic waters.
“After months of conjecture on when the Fed will drop the word patience from its FOMC statement, the wait seems to be almost over,” analysts at Citi told The Financial Times.
“It’s almost that time where we will have to wade through a raft of analysis and speculation on when the Fed will begin raising rates, as well as deal with some hefty market swings.”
Expectations that the Fed Reserve would drop its pledge to be patient before affecting a lending rate hike coupled by the ECB’s share buyback program have sparked a rally in European stocks.
The FTSEurofirst 300 index jumped 0,4% buoyed by an unprecedented 1.5% gain by London’s FTSE 100. The MSCI’s all country index of equity performance in 48 countries was 1.2% up.
“The (U.S. stock) market is going to have trouble with interest rates the rest of the year,” Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis, told Reuters.
“Oil might be pressuring things a little bit,” he said. “There’s a lot in there for the market to be very volatile today.”
China stocks rallied for a sixth straight session buoyed by property and weak economic data which sparked fresh hopes that the government would announce a new stimulus. T
he country’s major indexes recorded seven-year highs with trading volumes at a 60-day high.
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