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Wall St flat as Fed statement looms

Thursday, September 13 15:03:34

U.S. stocks were little changed today, ahead of a possible decision on further economic stimulus measures at the conclusion of the Federal Open Market Committee policy meeting later in the day.

The Federal Reserve appears poised to launch a third round of unconventional monetary stimulus, while signalling that a weak economy may warrant ultra-low interest rates for at least another three years. The FOMC announces its decision later today.

With the S and P 500 up more than 9 percent since the start of June on expectations global central banks will act to combat slowing growth, some analysts are wondering how much further the index can climb.

"The upside (for stocks) is probably less than the downside - the real question is what is the long-term impact and can we get coordinated fiscal policy and governmental or congressional stimulus in conjunction with the monetary policy," said Jordan Waxman, a managing director at HighTower Advisors in New York.

"Until that time, you might have had a nice bid under certain assets but you don't have a sustainable growth market until you get that coordination."

The dollar fell, hitting a seven-month low against the yen and holding near a four-month low versus the euro, on expectations for more stimulus measures from the Fed.

Economic data showed the number of Americans filing new claims for jobless benefits rose more than expected last week to 382,000, with several states reporting an increase related to Tropical Storm Isaac. Economists polled by Reuters had forecast that claims would rise to 370,000 last week.

Separately, the August producer price index increased 1.7 percent last month, the largest gain since June 2009, as the cost of energy surged, although underlying inflation pressures were contained.

The Dow Jones industrial average dropped 3.92 points, or 0.03 percent, to 13,329.43. The Standard and Poor's 500 Index dropped 0.90 points, or 0.06 percent, to 1,435.66. The Nasdaq Composite Index gained 0.60 points, or 0.02 percent, to 3,114.92. (C ) Reuters