Stocks turn lower ahead of Fed policy meeting

AP News
Posted: Mar 17, 2015 7:59 AM
Stocks turn lower ahead of Fed policy meeting

LONDON (AP) — Stocks markets turned lower in European trading on Tuesday, after gains in Asia, as investors braced for what the Federal Reserve might say on interest rates at its policy meeting this week.

KEEPING SCORE: In early European trading, Britain's FTSE 100 was flat at 6,804.99 while Germany's DAX fell 1.5 percent to 11,989.66. France's CAC 40 was down 0.8 percent at 5,017.52. Wall Street was set for a tepid start, with Dow and S&P 500 futures down 0.3 percent.

FED WATCH: Whether the Fed will drop the word "patient" in describing its timetable for raising interest rates from a record low is a focal point for investors this week. Most economists expect the word to be removed from the statement the Fed will issue on Wednesday. But estimates of when the first rate hike will come are swinging between mid-year and later in the year. Weak U.S. economic data Monday pushed expectations toward later in the year. Last week, strong U.S. jobs had many picking mid-year. Stock markets have been boosted for several years by low interest rates.

CHINA CHEER: Chinese stocks extended gains a day after the market's key index surged to its highest level in more than five years. The rally was driven by hopes the government will announce new economic stimulus after Premier Li Keqiang said on the weekend it has plenty of room and options for boosting growth. China's economy, the world's second-largest, expanded at its slowest pace in nearly a quarter century last year.

THE QUOTE: "The biggest source of uncertainty at the moment is what will happen with the U.S. and rates liftoff, given the country is faced with a different set of fundamentals to the rest of the world," IG strategist Stan Shamu said in a commentary. "Comments by Chinese Premier Li Keqiang over the weekend gave equities in China a put and this has resonated elsewhere in the region."

ASIA'S DAY: Japan's Nikkei 225 rose 1 percent to 19,437.00 and South Korea's Kospi jumped 2.1 percent to 2,029.91. Hong Kong's Hang Seng was down 0.2 percent to 23,901.49 and China's Shanghai Composite added 1.6 percent to 3,502.85, extending its gain from the previous session. Stocks in Australia and Southeast Asia were also higher.

ENERGY: Oil continued its decline after hitting a six-year low on supplies outpacing demand. Benchmark U.S. crude was down $1.08 to $42.80 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 96 cents to close at $43.88 a barrel on Monday.

CURRENCIES: In currency trading, the euro strengthened to $1.0612 from $1.0578. The dollar inched down to 121.23 yen from 121.37 yen.