By Victor Reklaitis and Anora M. Gaudiano, MarketWatch
'Investors are less optimistic about the economy than the Fed,'
analyst says
U.S. stocks edged higher on Tuesday, putting the Dow industrials
and the S&P 500 index on track to build on the prior session's
record close as the Federal Reserve kicks off its two-day
meeting.
The central bank's Federal Open Market Committee is widely
expected to announce its third and final interest-rate rise of 2017
on Wednesday, but investors want to see what the policy-making body
signals about 2018.
What are the main benchmarks doing?
The S&P 500 was up by 2 points, or 0.1%, to 2,662, trading
above its previous record close.
The Dow Jones Industrial Average advanced by 108 points, or
0.4%, to 24,494, also trading in record territory.
The Nasdaq Composite was under pressure, trading slightly lower,
down 9 points, or 0.1%, to 6,866.
The three equity gauges have scored strong gains in 2017, helped
by factors such as an expanding U.S. economy, rising corporate
profits, anemic expected returns for other assets and bets that the
Trump administration will deliver tax cuts and other
business-friendly policies. They are up between 19% and 28% as of
Monday's close.
What are strategists saying?
"As the rate hike tomorrow is highly priced in, it's not the
decision itself that will be important, but how the Fed's views the
economy. At the moment, markets are less optimistic about growth
and inflation than the Fed," said Kjersti Haugland, chief economist
at DNB, Norway's largest financial services group.
"Market participants are more concerned about a looming
recession or low inflation. The risk here is that the Fed is
correct and wage inflation and consumer inflation will come back
with vengeance, in which case they will have to be more
aggressive," Haugland said.
What could help drive markets?
The Fed's policy makers are scheduled to begin their meeting
Tuesday and then announce their interest-rate decision at 2 p.m.
Eastern time on Wednesday. The announcement will be followed by
departing Fed chief Janet Yellen's last news conference in that
role.
Read more:Fed getting ready to hike as retail sales, but not
inflation, pick up
(http://www.marketwatch.com/story/fed-getting-ready-to-hike-as-retail-sales-but-not-inflation-picks-up-2017-11-29)
And see:Stock-market investors aren't afraid of the Fed anymore
(http://www.marketwatch.com/story/stock-market-investors-arent-afraid-of-the-fed-anymore-2017-12-09)
A November reading on small-business confidence rose to its
second-highest level on record
(http://www.marketwatch.com/story/small-business-sentiment-in-november-powers-to-the-second-highest-reading-on-record-2017-12-12).
U.S. producer price index jumped 0.4% in November and is up 3.1%
over the past 12 months.
Check out:MarketWatch's Economic Calendar
(http://www.marketwatch.com/economy-politics/calendars/economic)
An update on the federal budget is expected at 2 p.m. Eastern
time.
Which stocks look like key movers?
Shares in Boeing Co.(BA) gained 3.2% after the aerospace giant
late Monday announced boosts to its dividend and share-repurchase
plan
(http://www.marketwatch.com/story/boeing-increases-dividend-and-share-repurchase-plan-shares-gain-2017-12-11).
Shares in Comcast Corp.(CMCSA) tacked on 2.3% following news
late Monday that the conglomerate is no longer bidding for
entertainment assets
(http://www.marketwatch.com/story/comcast-drops-out-of-fox-bidding-disney-reportedly-still-in-talks-2017-12-11)
from 21st Century Fox Inc.(FOX) That could leave Walt Disney
Co.(DIS) as the sole bidder remaining for the Fox assets.
Shares of Mattel Inc.(MAT) sank 3.6% after the toy maker warned
of a gloomy holiday season, saying it will likely have to write
down inventory and offer steep discounts.
What are other assets doing?
European stocks largely edged higher
(http://www.marketwatch.com/story/european-stocks-edge-slightly-higher-as-oil-shares-charge-up-2017-12-12),
while most major Asian equity gauges closed lower
(http://www.marketwatch.com/story/asian-stocks-end-mostly-lower-but-rising-oil-prices-help-australias-benchmark-rise-2017-12-12).
Gold futures
(http://www.marketwatch.com/story/gold-pauses-selloff-as-dollar-softens-though-pressure-from-stock-bitcoin-gains-persists-2017-12-11)
were inching down, while oil futures gained, with the Brent crude
rising to a fresh 2 1/2 -year high
(http://www.marketwatch.com/story/brent-oil-rises-to-fresh-212-year-high-as-north-sea-pipeline-outage-reverberates-2017-12-12)
as news of a major North Sea oil pipeline shutdown continued to
reverberate.
The ICE U.S. dollar index was little changed. January bitcoin
futures were retreating below $18,000 as their second full day of
trading got underway
(http://www.marketwatch.com/story/bitcoin-futures-keep-their-grip-on-18000-while-bitcoin-itself-stays-near-17000-2017-12-12),
while bitcoin itself changed hands not far from the $17,000
mark.
(END) Dow Jones Newswires
December 12, 2017 10:18 ET (15:18 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.