Investors wait for final Fed decision of 2013
NEW YORK (AP) -- Stocks were flat on Wall Street on Wednesday as investors wait for the Federal Reserve to end its last two-day policy meeting of 2013.
Homebuilder stocks rose sharply after the government reported that construction of new homes surged in November. Micron Technology, a semiconductor maker, was among the biggest losers in the technology sector.
KEEPING SCORE: The Dow Jones industrial average was up 21 points, or 0.1 percent, to 15,896 as of 12:10 p.m. Eastern. The Standard & Poor's 500 index lost 2 points, or 0.1 percent, to 1,779 and the Nasdaq composite was down 18 points, or 0.4 percent, to 4,005.
FED DAY: Policymakers at the Federal Reserve will vote Wednesday on whether to keep up the bank's economic stimulus program. The central bank has been buying $85 billion in bonds a month to keep interest rates low and stimulate the economy. Investors widely expect the Fed will wind down the program within the next year. However few think the Fed would do it this week with the end of the year approaching and most of the country heading on vacation in the next two weeks. Many economists expect that the pullback is likely to come in March.
THE QUOTE: Alec Young, global equity strategist at S&P Capital IQ, says investors have been ready for the Fed to scale back its stimulus for weeks. "This is widely anticipated, so I don't think it will be the end of the world once it finally happens," Young says.
MEET THE PRESS: Outgoing Federal Reserve Chairman Ben Bernanke will hold his last press conference shortly after Wednesday's Fed decision is announced at 2 p.m. Eastern time. Bernanke's comments have often moved the market in the past, so there could be some volatility this afternoon.
TECHNOLOGY STUMBLES: Micron Technology fell $1.76, or 8 percent, to $21.16 on concerns that the company could face increased competition from overseas. Micron dragged other technology stocks lower, particularly memory storage companies Western Digital, Seagate Technology and SanDisk.
BUILDING BLOCKS: Markets are also reacting to good news on the housing front. The Commerce Department says builders broke ground on homes at the fastest pace in more than five years and 23 percent more than in October. Permits for single-family homes rose, indicating that builders are increasingly confident in the market. The homebuilder Lennar surprised Wall Street by reporting a 32 percent profit increase. The stock gained 90 cents, or 3 percent, to $36.09.
NOT SO FORD TOUGH: Ford slumped $1.44, or 9 percent, to $15.26 after the company issued a three-year profit forecast that came in short of investors' expectations. The company cited a large number of vehicle launches in 2014 as well as weakness in overseas markets. General Motors lost $1.57, or 4 percent, to $39.97.