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U.S. Stocks Close Narrowly Mixed Ahead Of Fed Announcement

wallstreet aug27 21sep21 lt

Stocks showed a lack of direction over the course of the trading session on Tuesday following the sell-off seen during trading on Monday. The major averages spent the day bouncing back and forth across the unchanged line before closing narrowly mixed.

While the Nasdaq rose 32.50 points or 0.2 percent to 14,746.40, the Dow dipped 50.63 points or 0.2 percent to 33,919.84 and the S&P 500 edged down 3.54 points or 0.1 percent to 4,354.19. The Dow ended the session at its lowest closing level in three months.

The choppy trading on Wall Street came as traders looked ahead to the Federal Reserve's monetary policy announcement on Wednesday.

The Fed is widely expected to leave monetary policy unchanged but could address the outlook for its asset purchase program.

The minutes of the Fed's last meeting signaled the central bank was prepared to begin scaling back asset purchases by the end of the year.

With some recent disappointing economic data suggesting the Fed could push back its plans, traders are likely to pay close attention to the wording of the post-meeting statement.

On the U.S. economic front, new residential construction in the U.S. increased by more than expected in the month of August, according to a report released by the Commerce Department on Tuesday.

The report said housing starts jumped by 3.9 percent to an annual rate of 1.615 million in August from a revised rate of 1.554 million in July.

Economists had expected housing starts to increase to a rate of 1.580 million from the 1.534 million originally reported for the previous month.

The Commerce Department also said building permits spiked by 6.0 percent to an annual rate of 1.728 million in August from a revised rate of 1.630 million in July.

Building permits, an indicator of future housing demand, had been expected to drop to a rate of 1.610 million from the 1.635 million originally reported for the previous month.

Most of the major sectors showed only modest moves on the day, contributing to the lackluster close by the broader markets.

Computer hardware and airline stocks saw notable weakness on the day, while strength was visible among biotechnology and oil stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index tumbled by 2.2 percent, while Hong Kong's Hang Seng Index rose by 0.5 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.'s FTSE 100 Index jumped by 1.1 percent, the German DAX Index and the French CAC 40 Index surged up by 1.4 percent and 1.5 percent, respectively.

In the bond market, treasuries moved modestly lower ahead of the Fed's monetary policy announcement. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.5 basis points to 1.324 percent.

Looking Ahead

The Fed's monetary policy announcement is likely to be in the spotlight on Wednesday, overshadowing a report on existing home sales.

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