Wall St flat as Fed meeting and elections approach (Reuters)
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NEW YORK (Reuters) – Stocks were little changed on Friday as investors continued to assess prospects for monetary stimulus by the U.S. Federal Reserve and ahead of elections that could change the balance power in Washington.
Market action in the last several weeks has been dictated by prospects the Fed will announce another round of asset buying next Wednesday. Mid-term elections next Tuesday have also preoccupied investors, with polls indicating a Republican takeover of the House of Representatives.
Analysts said the government's gross domestic product report was positive, showing 2 percent annualized growth rate in the third quarter as forecast, but the data took a backseat to stimulus speculation.
"There's big news next week, and most of it is built into the market, some ideas about how many pro-business people will move to Washington and how proactive the Fed will be," said Richard Sichel, chief investment officer at Philadelphia Trust Co.
"In both cases, investors have been fairly optimistic for some months now about what we'll see. When we do get that next week, the market will probably get back to looking at earnings," Sichel said.
With 335 S&P 500 companies having reported so far, some 77 percent have beaten earnings estimates. That is just shy of the record beat rate of 79 percent in the third quarter of 2009, according to Thomson Reuters data.
Still, earnings have taken a back seat to macroeconomic news.
The Dow Jones industrial average (.DJI) dropped 2.73 points, or 0.02 percent, to 11,111.22. The Standard & Poor's 500 Index (.SPX) dropped 0.34 point, or 0.03 percent, to 1,183.44. The Nasdaq Composite Index (.IXIC) gained 6.51 points, or 0.26 percent, to 2,513.88.
While the S&P 500 is flat so far this week, the index is up almost 4 percent for the month, and investors could take the opportunity to lock in profits during the session.
Microsoft Corp (MSFT.O) rose 1.5 percent to $26.68 a day after it reported a profit that beat estimates on higher sales of its flagship software.
On the downside, Chevron Corp (CVX.N) posted a weaker-than-expected profit, and its shares fell 1.7 percent to $83.05.
(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)
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