08:00 EST, 17 September 2015
08:00 EST, 17 September 2015
By Tanya Agrawal
Sept 17 (Reuters) – Wall Street was set to open slightly
lower on Thursday, with investors reluctant to take big
positions ahead of the Federal Reserve’s interest rate decision
later in the day.
The Fed will announce the outcome of its policy meeting and
release its latest economic projections at 2 p.m. ET (1800 GMT),
followed by a news conference by Chair Janet Yellen at 2:30 p.m.
An increase in the Fed’s benchmark rate, which has been near
zero since the depths of the financial crisis in December 2008,
would be the first since 2006.
The low rates have helped nurse the economy back to health
since the crisis and underpinned a spectacular six-year bull run
for stocks. However, there are concerns that continuing with
ultra-low rates for too long will lead to asset bubbles such as
the one in property prices that led to the last recession.
Fed fund futures <_> indicate a 30 percent chance the
central bank will raise rates on Thursday, while 35 of 80
economists polled by Reuters expect a move.
“Investors are in wait-and-see mode,” said Art Hogan, chief
market strategist at Wunderlich Securities in New York.
Any reaction to whatever the Fed does on Thursday is likely
to be short-lived, he said.
“The real reaction is going to be felt in the coming weeks
as we look at corporate earnings, economic activity and other
Whether or not the Fed raises rates on Thursday, investors
will be hanging on every word during Yellen’s news conference.
If the Fed does not move, the focus will shift to its next
meeting on Oct. 27-28.
Uncertainty about when the Fed will switch gears has dogged
Wall Street for months – a situation that has been complicated
in recent weeks by market turbulence linked to slowing growth in
China and worries about the health of the global economy.
However, many analysts say a rate hike now would at least
remove a lot of the uncertainty that has troubled investors.
Energy stocks pushed Wall Street higher on Wednesday after
an almost 6-percent jump in oil prices, but trading was thin.
Oil prices were a little weaker on Thursday.
“As it stands now considering (Wednesday’s) market rally,
the bearish decision will be for the Fed not to hike,” Mike
O’Rourke, chief market strategist at Jones Trading, said in a
S&P 500 e-minis were down 7.25 points, or 0.36
percent, with 177,176 contracts traded by 8:44 a.m. ET. Nasdaq
100 e-minis were down 13 points, or 0.3 percent, on
volume of 18,893 contracts, while Dow e-minis were down
50 points, or 0.3 percent, with 16,218 contracts exchanged.
The Fed has said it will raise rates when it sees a
sustained recovery in the economy.
Data on Thursday showed the number of Americans filing new
applications for unemployment benefits fell last week to the
lowest level in eight weeks.
Other data showed that housing starts fell more than
expected in August, but a rebound in building permits pointed to
sustained strength in the housing market, which should support
Shares of Cablevision jumped 15.9 percent to $33.08
in premarket trading after European telecoms group Altice
agreed to buy the company in a deal valued at $17.7
Oracle was down 3.2 percent at $37.06 a day after
the company warned that revenue could fall in the current
(Reporting by Tanya Agrawal; Editing by Ted Kerr)
Sorry we are not currently accepting comments on this article.