Wall Street fell as investors eyed the Federal Open Market Committee which started its two-day meeting today but will have to wait until tomorrow to find out if there will be an easing this month of the central bank's pace of bond-buying.
In afternoon trading in New York, the Dow
Jones Industrial Average slipped 0.05 per cent, the Standard & Poor's 500 Index fell 0.35 per cent, while the Nasdaq Composite Index declined 0.20 per cent. Shares of Verizon Communications fell, as did those of IBM, leading the decliners in the Dow.
"There are so many people watching the Fed's decision, so much money on the edge," Sam Wardwell, an investment strategist at Pioneer Investments in Boston, told Bloomberg News. "Everybody knows the Fed is going to taper sooner or later. The question is, are people putting on too many short positions, or not enough short positions? This is everybody betting on the outcome so the market is going to be volatile."
The Consumer Price Index was steady in November, following a 0.1 per cent decline in October, according to Labor Department data. In the 12 months through November, the CPI increased 1.2 per cent.
"If the Fed wanted an excuse to continue with the full bond purchases they could use the inflation numbers," Gus Faucher, a senior economist at PNC Financial Services in Pittsburgh, told Reuters. "But given the strength in what we have seen in the labour market and in other economic indicators, I think they do want to reduce their purchases."
