Stocks Turn Mixed Ahead Of Fed Decision

Stocks Turn Mixed Ahead Of Fed Decision

	Published : Wed, 21 Mar 2007 15:07 By : Agencies Print this Story

NEW YORK (AP) - Stocks were little changed in tepid trading Wednesday as investors awaited the Federal Reserve's latest take on the economy, which could signal where interest rates are headed. The Dow Jones industrials slipped after two sessions of gains, while other indexes nudged higher.

While Wall Street largely expects the Fed will leave short-term interest rates unchanged at 5.25 percent, investors are eager to learn whether the central bank will reveal a shift in its assessment of the economy. The Fed has remained vigilant about the threat of inflation, which it has said remains stubbornly high. However, a softening economy could quell the threat of inflation and, some investors are hoping, open the way for a rate cut.

The Fed left interest rates unchanged at its last five meetings after a string of 17 straight increases that began in 2004.

In the first hour of trading, the Dow Jones industrial average fell 7.69, or 0.06 percent, to 12,280.41.

Broader stock indicators made modest gains. The Standard & Poor's 500 index rose 0.80, or 0.06 percent, to 1,411.74, and the Nasdaq composite index advanced 3.84, or 0.16 percent, to 2,412.05.

Bonds fell ahead of the Fed decision. The yield on the benchmark 10-year Treasury note rose to 4.59 percent from 4.55 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.

While most of Wall Street's attention will remain squarely on the Fed, a few key earnings reports should also draw interest. Morgan Stanley's fiscal first-quarter earnings and revenue blew past Wall Street's estimates and FedEx Corp.'s fiscal third quarter earnings came in stronger than expected but the shipping company warned profits in the coming fiscal year could fall below its expectations.

Morgan Stanley rose $2.47 ,or 3.2 percent, to $78.58, while FedEx fell $2.58, or 2.3 percent, to $109.71.

The Russell 2000 index of smaller companies fell 0.09, or 0.01 percent, to 793.51.

Overseas, stocks markets in Japan were closed for a holiday. Hong Kong's Hang Seng index rose 0.82 percent and the sometimes volatile Shanghai Composite Index rose 0.83 percent to a new record. A nearly 9 percent drop in the Shanghai index on Feb. 27 helped kick off a global selloff that shaved more than 3 percent from the major U.S. stock indexes and reintroduced volatility to an unusually calm U.S. market. The drop in Shanghai came after the ascendent index, which rose 130 percent last year, had set a string of record closes.

In afternoon trading, Britain's FTSE 100 rose 0.87 percent, Germany's DAX index rose 0.26 percent, and France's CAC-40 advanced 0.14 percent.