Wall St pares gains as energy, utilities drag

NEW YORK: The S&P 500 slipped into the red and the Dow pared gains in late morning trade on Wednesday, led by losses in energy and utilities sectors, ahead of the Federal Reserve's decision on interest rates.

However, the Nasdaq, which is more technology heavy, was lifted by a 5.6 percent rise in Apple after the company's strong earnings and iPhone sales.

The Fed is expected to keep interest rates unchanged in its first policy meeting after President Donald Trump took office, as the central bank seeks greater clarity on his economic policies.

Investors will parse the Fed's statement, expected at 2:00 p.m. ET (1900 GMT), for any changes following a spate of strong economic data. "We're in a very stable market with a lot of cross-currents.

Fourth-quarter earnings seem to be okay," said Chuck Self, chief investment officer at iSectors LLC in Appleton, Wisconsin. "However, political uncertainty is making it hard for investors to have conviction in the market."

Wall Street has paid close attention to Trump's comments and decisions, which have caused volatility in the market.

His move to restrict travel to the United States unleashed uncertainty and losses on Wall Street in the past few days.

At 11:06 a.m. ET the Dow Jones Industrial Average was up 15.21 points, or 0.08 percent, at 19,879.3, the S&P 500 was down 2.2 points, or 0.09 percent, at 2,276.67 and the Nasdaq Composite was up 14.84 points, or 0.26 percent, at 5,629.63.

Investors hope quarterly earnings support valuations, especially after a post-election rally pushed Wall Street to record highs. Earnings of S&P 500 companies are estimated to have risen 7.1 percent in the latest quarter, according to Thomson Reuters I/B/E/S.

However, investors are struggling with the question of whether the rally has gone ahead of itself, Self said.

The S&P 500 is trading at 17.6 times forward 12-month earnings, above the 10-year median of 14.7 times, according to StarMine data.

Eight of the 11 major S&P 500 sectors were lower, with energy's 0.84 percent loss dragging the broader index, followed by utilities.

Dow component Exxon slipped 1 percent after a string of price target cuts.

The oil major had reported results on Tuesday. While Apple provided the biggest boost to the three indexes, Microsoft fell 1.2 percent and dragged down the S&P and the Nasdaq.

Oneok Partners jumped 25 percent to $54 after biggest shareholder Oneok Inc said it would buy the rest of the company for $9.3 billion. Declining issues outnumbered advancers on the NYSE by 1,489 to 1,293.

On the Nasdaq, 1,430 issues rose and 1,228 fell.

The S&P 500 index showed 28 new 52-week highs and two new lows, while the Nasdaq recorded 97 new highs and 12 new lows.