By Barbara Kollmeyer and Anora Mahmudova, MarketWatch
Crude prices sharply lower after unwelcome supply surprise
NEW YORK (MarketWatch) -- U.S. stocks drifted lower ahead of the
FOMC decision on Wednesday afternoon as investors grew nervous
about whether the Fed will strike the right balance in the
statement by removing the word 'patient' and paving the way for its
first rate hike in nearly a decade.
The S&P 500 (SPX) inched lower with eight of its 10 main
sectors trading lower, led by consumer staples, consumer
discretionary and industrials. Utilities and energy-related shares,
all considered less rate sensitive, were seeing gains.
The Dow Jones Industrial Average (DJI) was down more than 120
points, after shedding more than 100 points near the open. About
75% of the Dow's 30 components were trading lower with Visa Inc.
(V) among the biggest losers.
The Nasdaq Composite (RIXF) also declined.
"The sole aim today will be to move to a more data-dependent
stance without appearing to commit to a June rate hike," said
Rebecca O'Keeffe, head of investment at stockbroker Interactive
Investor, in a note.
Read: How markets may react to Fed's lack of patience
(http://www.marketwatch.com/story/how-markets-may-react-to-feds-lack-of-patience-2015-03-17)
Bob Baur, chief global economist at Principal Global Investors,
said the Fed wants to maintain the most flexibility as it attempts
to lift rates.
The Fed wants "some flexibility to be able to raise rates fairly
soon," Baur noted. "But they don't want to be locked in," to a
specific timetable, he added.
The bulk of the news will come at 2 p.m. Eastern Time, when a
six-paragraph policy statement is released, along with revamped
economic forecasts and the "dot plot" path of interest rates from
the 17 central bankers. Fed Chairwoman Janet Yellen will speak at a
news conference at 2:30 p.m. More details on that here
(http://www.marketwatch.com/story/heres-what-to-watch-from-the-fed-this-week-2015-03-16).
(http://www.marketwatch.com/story/heres-what-to-watch-from-the-fed-this-week-2015-03-16)The
smart money and the Fed: Stan Shamu, market strategist at IG, said
in a note that many feel that Yellen will get it "absolutely
right." And he said the smart money will be looking to react to the
results rather than trying to get ahead of the central bank's
moves.
"The simple reasoning is that the move isn't likely to be a mere
flash in the pan and there will be plenty to digest from the
meeting and news conference. As a result there will be ample time
for traders to initiate positions once all the facts are on the
table," said Shamu in a note.
For two officials, a 'Field of Dreams' moment on FOMC
(http://www.marketwatch.com/story/for-two-officials-a-field-of-dreams-moment-on-fomc-2015-03-17)
Stocks to Watch: Oracle Corp.(ORCL) shares jumped after the
company posted flat earnings, but hiked its dividend
(http://www.marketwatch.com/story/oracle-adobe-burlington-stores-earnings-in-focus-2015-03-17).
Adobe Systems Inc.(ADBE) shares slumped after the company said
subscriber growth badly missed expectations.
Quiksilver Inc.(ZQK) jumped 9% after the outdoor sports apparel
maker reported a narrower-than-expected loss
(http://www.marketwatch.com/story/quiksilvers-stock-rallies-after-narrower-than-expected-loss-2015-03-17)
late Tuesday.
FedEx Corp.(FDX) shares fell after the company reported a
better-than-expected fiscal third-quarter profit
(http://www.marketwatch.com/story/fedex-beats-profit-expectations-but-provides-a-downbeat-outlook-2015-03-18)
but missed revenue estimates.
Guess Inc.(GES) and Williams-Sonoma Inc.(WSM) also are expected
to report quarterly results.
Kraft Foods Group Inc.(KRFT) shares fell after the company has
recalled 242,000 cases of Kraft Macaroni & Cheese Dinner boxes
(http://www.marketwatch.com/story/kraft-recalls-242000-cases-of-mac-cheese-dinners-2015-03-18),
saying specific products could contain small metal pieces.
Read more about stock action in the Movers & Shakers column
(http://www.marketwatch.com/story/fedex-general-mills-williams-sonoma-earnings-in-focus-2015-03-18).
Other markets: European stocks reversed earlier losses and moved
higher. The dollar (DXY) as well, was stuck in ranges and gold was
slightly lower, while U.S. crude prices were piling on losses
(http://www.marketwatch.com/storyno-meta-for-guid) after the
American Petroleum Institute late Tuesday posted a much
sharper-than-expected rise in crude supplies than expected
(http://www.marketwatch.com/story/api-data-show-105-mln-barrel-rise-in-us-crude-supply-2015-03-17).
April crude (CLJ5) was last down about $1.34 to $42.12 a
barrel.
(ESM5)In Asia, the Shanghai Composite
(http://www.marketwatch.com/story/asian-shares-mixed-china-gains-on-stimulus-hopes-2015-03-18)
rallied 2.1% to a near seven-year high.
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