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NEW YORK - Wall Street may stall at the start of this week, as investors wait for the outcome of the Federal Reserve's policy meeting.
No change in interest rates is expected when the Federal Open Market Committee convenes on Tuesday for its last meeting of the year. But investors will comb through the FOMC's statement for some insight into how the Fed sees the economy.
"Traders are going to be positioning for the Fed meeting," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. "Players are becoming a little bit more concerned here."
The caution may linger until Wall Street sees Friday's data on the US Consumer Price Index for November. Investors will be anxious to learn whether inflation was mild enough to keep Americans spending -- and driving US economic growth.
Investors are still digesting a month's worth of confusing economic data. Although stocks reversed two weeks of poor performance and finished this week with gains, they are still on shaky ground, analysts said.
For the week, the Dow Jones industrial average rose 0.93 per cent and the Standard & Poor's 500 index gained 0.94 per cent, while the Nasdaq Composite Index climbed 1 per cent.
On Tuesday, the US central bank is likely to keep the fed funds rate at 5.25 per cent. The FOMC's statement is due at 2:15 p.m. (1915 GMT)
"With the absence of the Fed really doing anything, I think there will be more of a view toward what is happening with the economy and how that might impact the equity and fixed-income markets," said Neil Wolfson, chief investment officer at Wilmington Trust in New York.
- REUTERS
