While you were sleeping: Dow ekes out record high

Trader Michael Urkonis, center, works on the floor of the New York Stock Exchange. Photo / AP

Wall Street inched higher, with the Dow reaching a fresh record, as the Federal Open Market Committee began its two-day meeting after which it is widely expected to announce a plan for the reduction of its balance sheet.

"People are in wait-and-see mode," Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts, told Reuters. "The expectations are that rates will remain unchanged and they [the Fed] will start balance sheet unwinding. But there's always a possibility of surprise. I think that's why investors are cautious."

In 2.26pm trading in New York, the Dow Jones Industrial Average rose 0.2 per cent, while the Nasdaq Composite Index added 0.1 per cent. In 2.11pm trading, the Standard & Poor's 500 Index gained 0.1 per cent.

"We are not overly concerned about" the Fed's quantitative-tightening plans, Merrill Lynch and US Trust head of fixed-income strategy Matthew Diczok told Bloomberg.

"If you model it out, over about the next three years they'll take out about US$1.3 trillion or so," Diczok noted. "That's only a third of what they put into the market. So it's going to be very slow, very gradual, very deliberate and it shouldn't lead to any near-term fireworks into the market at all."

Earlier in the day the Dow inched higher to a fresh record high of 22,386.01.

The Dow climbed as gains in shares of Verizon and those of JPMorgan Chase, recently up 2 per cent and 1.5 per cent respectively, outweighed slides in shares of UnitedHealth and those of General Electric, recently down 2.3 per cent and 1.6 per cent respectively.

Shares of Kohl's climbed, up 2.2 per cent as of 2.09pm in New York, after the department store operator it will offer free returns for Amazon customers starting in October. Kohl's said it will pack and ship eligible Amazon return items for free within 82 Kohl's stores across Los Angeles and Chicago.

"We think this is a unique way to draw foot traffic into stores and to expand reach to new customers, while giving Amazon low-risk access to a brick-and-mortar presence," Morningstar analyst Bridget Weishaar wrote in a note, Reuters reported.

In Europe, the Stoxx 600 Index ended the day little changed from the previous close. Germany's DAX Index eked out a 0.02 per cent gain, France's CAC 40 Index added 0.2 per cent, while the UK's FTSE 100 Index rose 0.3 per cent.

Shares of Heineken dropped 3.8 per cent in Amsterdam after Fomento Economico Mexicano, a Mexican bottler and retailer, said it sold a 5.24 per cent stake in the world's No. 2 brewer for about 2.5 billion euros (US$3 billion).

Shares of Ocado slid 2 per cent after the British online grocer warned short-term costs might rise because of its investment in a new distribution centre.