US stocks make small dip ahead of FOMC

Share prices have retreated slightly today on Wall Street, as investors eagerly await the Fed’s decision on whether to scale back its stimulus or not.

The outcome of the latest FOMC meeting will be revealed at 7pm GMT, with a press conference from Chairman Ben Bernanke to follow at 7.30pm. We can expect at least some volatility in the wake of the decision, and that could be exacerbated depending on what the Chairman has to say.

By early afternoon in New York, the Dow was off by just 0.08% or 12 points at 15,863, while the broader S&P 500 index was down 0.33% at 1775.1.

The Fed will have been mulling over data that has largely been positive and the latest report today offered little to change that theme of improvement, with housing starts spiking in November, rising 22.7% to an annualised level of 1.091 million units after an increase of just 1.8% in October.

After the bumper reading in yesterday’s NAHB housing market index, this latest result signals the housing market is picking up momentum, which could help to drive fourth-quarter GDP growth and adds to the pile of ammunition available to the hawks at the Fed arguing for an immediate taper.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.