Wall Street slips as Fed meets to decide on interest rates

Delhi: US stocks slipped at the open on Tuesday as investors fixed their sights on the outcome of a meeting where the Federal Reserve is widely expected to raise interest rates for the first time this year. 

The Fed meets over two days starting Tuesday, with traders pricing in a 90 percent chance of a quarter point rate hike as inflation picks up and the labor market shows solid strength. 

The central bank`s statement is due at 2:00 p.m. ET on Wednesday, which will be followed by Fed Chair Janet Yellen`s press conference.

"Ahead of a major data point like the Fed, you typically don`t see big investors move sharply in one way or the other," said Adam Sarhan, chief executive officer at 50 Park Investments in Florida. 

"Investors are taking a wait-and-see approach, don`t expect any fireworks today." 

Wall Street`s top banks were unanimous on the view the Fed would raise rates at its policy meeting, a Reuters poll showed on Friday.

The next big question for the market is whether the Fed signals a more aggressive tightening path than previously expected, especially as markets are betting on a potential economic boost from President Donald Trump`s proposed fiscal policies. 

Wall Street`s major indexes have been largely kept in check since the start of the month as investors prepared for higher rates following a slew of hawkish comments from top Fed officials.

At 9:37 a.m. ET (1337 GMT) the Dow Jones industrial average was down 26.64 points, or 0.13 percent, at 20,854.84, the S&P 500 was down 6.51 points, or 0.27 percent, at 2,366.96.

The Nasdaq Composite was down 20.37 points, or 0.35 percent, at 5,855.41.

Eight of the 11 major S&P sectors were lower, with the energy index`s 1.37 percent loss leading the decliners.

Oil prices fell to three-month lows after OPEC reported that crude inventories in developed countries had risen above the five-year average in January despite production cuts by some of the world`s largest exporters. [O/R]

Chevron fell 1.19 percent and was among the biggest drags on the Dow.

Shares of Valeant plunged 10.5 percent to $10.82 after billionaire investor William Ackman said his hedge fund, Pershing Square Capital Management, sold its entire stake in the company.

Dow component Wal-Mart was up 1.4 percent at $70.93.

Declining issues outnumbered advancers on the NYSE by 2,152 to 439. On the Nasdaq, 1,691 issues fell and 516 advanced.

The S&P 500 index showed five new 52-week highs and no new lows, while the Nasdaq recorded 13 new highs and 19 new lows.