NEW YORK >> U.S. stock indexes slipped this morning as investors wait for what’s expected to be one of the most telegraphed rate increases in history.
The Federal Reserve is wrapping up a policy meeting this afternoon, and virtually all of Wall Street is forecasting it will raise short-term rates by a quarter of a percentage point. It would be the second rate increase in a year and just the second in a decade.
KEEPING SCORE: The Standard & Poor’s 500 index fell 4 points, or 0.2 percent, to 2,267 as of 10:50 a.m. Eastern time. The Dow Jones industrial average fell 39 points, or 0.2 percent, to 19,8762 The Dow came close to breaching the 20,000 level for the first time on Tuesday. The Nasdaq composite fell 2 points, or less than 0.1 percent, to 5,462.
CENTRAL BANK MEETING: The Fed has kept short-term interest rates close to zero since the Great Recession in hopes of driving economic growth and averting a downward spiral in prices, a condition that economists call deflation.
The strengthening job market means investors see it as a nearly foregone conclusion that the Fed will announce a rate increase this afternoon. Perhaps more important will be clues about what the Fed sees for the future.
Many investors are forecasting the Fed will raise rates one or two more times in 2017. It’s walking a delicate balance: Higher interest rates make borrowing more expensive, which can slow corporate profits and economic growth, but one of the worst-case scenarios for the economy would be if inflation were to race higher because the Federal Reserve was too slow to raise rates.
MOSTLY, BUT ONLY SLIGHTLY, DOWN MARKET: Ten of the 11 sectors that make up the S&P 500 were down. Real-estate stocks fell the most, 0.9 percent. Technology stocks rose 0.3 percent. Roughly five stocks fell for every three that rose on the New York Stock Exchange.
BOND YIELDS: The yield on the 10-year Treasury note fell to 2.42 percent from 2.47 percent late Tuesday, a reversal from its upward trend over the last month. Interest rates have been climbing since the U.S. presidential election on expectations that inflation and economic growth may be heading higher.
ECONOMIC DATA: Reports released today offered a mixed picture of the U.S. economy. Retail sales edged up by just 0.1 percent in November, a weaker showing than economists expected.
Inflation at the wholesale level was higher than expected last month, though economists said it still looks fairly tame, while industrial production weakened.
WHERE THERE’S A WILL: Wells Fargo fell $1.15, or 2.1 percent, to $54.70 after federal regulators placed restrictions on the bank due to concerns about its “living will,” which lays out its plan of action in the event of a failure.
SKIDDING: Hertz Global Holdings fell $1.11, or 4.4 percent, to $24.02 after the struggling car rental company named a new chief executive officer. The company’s three longest-serving directors will also leave the board next month.
STICK WITH IT: Nordson, a maker of products that apply adhesives and coatings, rose $8.01, or 7.7 percent, to $112.28 after reporting higher sales and earnings than analysts expected. It also said orders look strong for its current quarter.
GOING PRIVATE: Neustar jumped $5.50, or 19.9 percent, to $33.15 after a group of private investors said it would buy the communications company for $33.50 per share in cash.
GLOBAL MARKETS: In Europe, Britain’s FTSE 100 dipped 0.1 percent, while Germany’s DAX slipped 0.2 percent and France’s CAC 40 lost 0.5 percent.
In Asia, Japan’s Nikkei 225 finished nearly unchanged at 19,253.61, just a titch above its one-year high close on Tuesday. South Korea’s Kospi and Hong Kong’s Hang Seng index also were up marginally.
COMMODITIES: Benchmark U.S. crude fell 33 cents, or 0.6 percent, to $52.65 per barrel in New York. Brent crude, the international standard, lost 22 cents to $55.50 a barrel in London. Gold rose $6.30, or 0.5 percent, to $1,165.30 per ounce. Silver rose 1.4 percent, and copper was flat.
CURRENCIES: The dollar was virtually flat against the Japanese yen. The euro inched up to $1.0627 from $1.0622 late Tuesday. The British pound rose to $1.2710 from $1.2667.
AP Business Writer Youkyung Lee contributed to this report from Seoul, South Korea.