By Yashaswini Swamynathan and Tanya Agrawal
U.S. stocks were lower on Tuesday as oil prices fell and investors focused on the Federal Reserve's policy meeting, where it is widely expected to raise interest rates.Trading volumes were light as a blizzard in the northeastern United States grounded flights and kept people indoors.Oil prices slid to three-month lows after OPEC reported a rise in global crude stocks and a surprise jump in production from its biggest member, Saudi Arabia. [O/R]Chevron was down 1.4 percent, while Exxon was off 0.9 percent. The stocks were among the biggest drags on the Dow and the S&P 500.The Fed meets over two days starting Tuesday, with traders pricing in a 90 percent chance of a quarter point rate hike as inflation picks up and the labor market shows solid strength. The central bank's statement is due at 2:00 p.m. ET on Wednesday, followed by Fed Chair Janet Yellen's press conference.
"You've got the Fed meeting later this week," said Michael Scanlon, portfolio manager at Manulife Asset Management in Boston."It's a foregone conclusion that the Fed will raise rates, but there is an expectation that the central bank may raise their expectation from three hikes this year to four."Wall Street's top banks were unanimous on the view the Fed would raise rates at its policy meeting, a Reuters poll showed on Friday.The next big question for the market is whether the Fed signals a more aggressive tightening path, especially as markets are betting on a potential economic boost from President Donald Trump's proposed fiscal policies.
The main U.S. indexes have been largely kept in check since the start of the month as investors prepared for higher rates following a slew of hawkish comments from top Fed officials.At 11:04 a.m. ET (1504 GMT) the Dow Jones Industrial Average was down 62.84 points, or 0.3 percent, at 20,818.64, the S&P 500 was down 11.83 points, or 0.49 percent, at 2,361.64.The Nasdaq Composite was down 34.88 points, or 0.59 percent, at 5,840.90.
Ten of the 11 major S&P sectors were lower, with the energy index's 1.5 percent loss leading the decliners.Shares of United Continental, American Airlines, Southwest Airlines were off between 2 and 4 percent.Valeant plunged 11.7 percent to $10.69 after billionaire investor William Ackman said his hedge fund, Pershing Square Capital, sold its entire stake in the company.Declining issues outnumbered advancers on the NYSE by 2,132 to 637. On the Nasdaq, 2,043 issues fell and 603 advanced.The S&P 500 index showed nine new 52-week highs and three new lows, while the Nasdaq recorded 30 new highs and 51 new lows. (Reporting by Yashaswini Swamynathan and Tanya Agrawal in Bengaluru; Editing by Anil D'Silva & Shri Navaratnam)
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Updated Date: Mar 14, 2017 22:30 PM