US stocks mixed as markets await Fed

NEW YORK: US stocks were mixed in opening trade Wednesday, as Wall Street awaited a key announcement from the Federal Reserve on its stimulus policies aimed at supporting the ailing US econonmy.

The Dow Jones Industrial Average dropped 13.55 points (0.11 percent) to 12,176.46 in the first half-hour of trading.

The broader S&P 500 edged upwards 0.19 point (0.01 percent) to 1,295.71, while the tech-heavy Nasdaq Composite dipped 1.63 points (0.06 percent) to 2,685.63.

The Federal Open Market Committee (FOMC) was to issue a statement later in the day expected to say that its latest round of quantitative easing, dubbed QE2, would expire as scheduled at the end of June.

Under the QE2 program announced in November, the Fed is pumping $600 billion into the US economy by buying Treasury bonds. Overall, the Fed has injected $2.3 trillion into the economy since the 2008 financial crisis.

The FOMC statement will be followed by a news conference by Federal Reserve chairman Ben Bernanke, who is expected to face tough questions about signs of weakness in the US economy, notably high unemployment.

"Traders and analysts are eagerly awaiting Bernanke's speech... with many wondering how the chairman will spin the recent string of weak economic reports," said Sarah Wasserman of Schaeffer's Investment Research.

One bright spot in the markets was FedEx. Shares of the Memphis, Tennessee-based logistics giant jumped 2.5 percent after the company reported that its net income surged 23 percent to $1.45 billion in fiscal 2011, beating forecasts.

Bond prices rose. The yield on the 10-year US Treasury note fell to 2.95 percent from 2.98 percent on Monday, while that on the 30-year bond dropped to 4.19 percent from 4.22 percent.

Bond prices and yields move in opposite directions.

Copyright AFP (Agence France-Presse), 2011