Investors wait for taper news from Fed

Written By limadu on Rabu, 18 September 2013 | 21.29

NEW YORK (CNNMoney)

The Federal Reserve will finally tell investors whether the central bank will cut back on its bond buying program in a statement at 2 p.m. Wednesday.

Investors have been bracing for the Fed to cut back -- or taper -- its stimulus measures for some time. The Fed has been buying $85 billion in bonds and other securities a month.

Many experts are forecasting the Fed will make a small cut to these purchases since the overall economy has improved and the unemployment rate has fallen.

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Fed chair Bernanke will offer more guidance on the central bank's longer-term plans at a 2:30 p.m. press conference.

The Dow, S&P and Nasdaq barely moved in early trading as investors waited for the Fed announcement. Analysts expect swings in both the stock and bond markets to come after the Fed statement.

What housing starts? Investors received one disappointing reading on the health of the economy before the Fed meeting though. The Census Bureau's monthly reports on housing starts and building permits came in below expectations.

But corporate news was better. FedEx (FDX, Fortune 500) reported an increase in quarterly sales and net income, compared to a year-ago. Earnings topped forecasts and shares rose on the news. FedEx is often viewed as an economic bellwether given the nature of its business and its global footprint.

Related: The taper is coming. Get over it.

Soccer club Manchester United (MANU) reported a jump in quarterly revenue, compared to the prior year, and a surge in net profit, compared to the year-earlier loss. The stock was up modestly.

Adobe Systems (ADBE) shares rose after the software maker reported strong subscription growth for its "Creative Cloud" service on Tuesday.

Related: Fear & Greed Index still in neutral

U.S. stocks finished higher Tuesday. The Dow Jones industrial average, the S&P 500 and the Nasdaq all ended the day with gains. The S&P closed within just five points of a record high.

European markets were mixed in midday trading. Asian markets were also mixed. Japan's Nikkei rallied by 1.4% but the main Chinese indexes were relatively unchanged. To top of page

First Published: September 18, 2013: 9:46 AM ET


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