NEW YORK (AFP) — Wall Street stocks drifted in a tight range in opening trade Tuesday with investors hesitant ahead of the first estimate of US economic output in the first quarter and a Federal Reserve policy decision.
In the first 10 minutes, the Dow Jones Industrial Average edged up 12.13 points (0.09 percent) to 12,883.88 and the Nasdaq added a fractional 0.22 points (0.01 percent) to 2,424.62.
The Standard & Poor's 500 broad-market index edged up by a fractional 0.10 points (0.01 percent) to 1,396.47.
Investors were awaiting the outcome of a two-day Federal Open Market Committee (FOMC) meeting set to open later Tuesday, with most analysts expecting a quarter-point cut in the base lending rate to 2.0 percent and a signal that the central bank is ready to pause after aggressively cutting rates since September.
A few analysts say the Fed might not cut rates at all.
"The big question everyone is talking about is whether the Fed has enough backbone to recognize that the bond market is right and the Fed should not ease tomorrow," said Andrew Busch at BMO Capital Markets.
"This would have the dual felicitous effect of rallying the US dollar and putting downward pressure on oil."
Also keeping the market cautious was a report set for Wednesday on US gross domestic product for the first quarter. Although many see a recession looming, the report could show sluggish growth.
The market meanwhile is digesting earnings reports still coming in from major firms.
"Another large batch of companies has reported quarterly earnings results, but overall, they have failed to move the needle that much as the market is in a wait-and-see mode ahead of the GDP data and the FOMC decision on Wednesday," said Patrick O'Hare at Briefing.com.
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