Daily Analysis – Equities Mixed As Investors Await FOMC Statement

Asian markets closed higher for a 3rd straight day, ahead of this week’s key policy meetings by both the Federal Reserve and the ECB. The Nikkei gained .7% to 8965, the Kospi surged 2.1% to 1882, and the ASX 200 rose .6% to 4269. The Hang Seng climbed 1.1% to 19797, while the Shanghai Composite continued to stubbornly buck the uptrend, slipping .3% to 2104. Resource related stocks were among the largest gainers, amid expectations that new easing policies will boost demand for commodities.

European markets snapped their 3-day winning streak, as stocks pulled back from their recent gains. The FTSE slumped 1% to 5635, the CAC40 dropped .9% to 3292, and the DAX closed down 2 points to 6772. UBS shares tanked 4.2% after reporting a significant drop in profits, largely due to its investment banking division.

US stocks settled moderately lower after a quiet session. The Dow erased 64 points to 13009, the S&P 500 fell .4% to 1379, and the Nasdaq declined .2% to 2936.


Apple shares rallied 2.6% following a report from Sanford Bernstein that the company may authorize a stock split. Such a move would enable the company to join the Dow Jones Industrial Average, which uses a price-weighed index, rather than a market-cap weighting like the S&P 500.

Currencies
Currencies settled mixed on Tuesday, as the market moved in a relatively narrow range. The Euro ticked up .4% to 1.2304, and the Franc rose .4% as well to .9764. The Pound eased .2% to 1.5674, and the Canadian Dollar closed down .1% to 1.0031. The Yen and Australian Dollar both ended little changed.

Economic Outlook
Consumer confidence unexpectedly climbed to 65.9 from 62.7 according to the Conference Board. Chicago PMI rose to 53.7 from 52.9, also beating estimates. Personal income was flat, and personal spending rose by .5%, in line with forecasts.

Wednesday’s focal point will be the Fed’s statement, scheduled for 2:15. The market is anticipating a new stimulus plan.