While you were sleeping: UPDATED US stocks end mixed as Fed confers

Stocks on Wall Street ended mixed as investors remained cautious amid a two-day meeting of Federal Reserve officials that began on Tuesday.

While the Fed is not expected to announce a rate hike on Wednesday, chairwoman Janet Yellen is expected to flag that there are rate increases ahead.

"The most prominent risk in January – the tightening in financial conditions at the start of the year – has receded," Goldman Sachs economists Zach Pandl and Jan Hatzius are reported by Reuters as saying.

"As a result, Mrs Yellen will likely indicate that the committee remains on track to raise rates again next quarter."

The overnight market moves come after a broad recovery in US stocks in the past month, with the S&P 500 up close to 8%, spurred by improving economic data and relative stability in commodities prices.

“We’re running out of steam here,” says Jeremy Zirin, chief equity strategist at UBS Wealth Management Americas, according to the Wall Strret Journal.

In Tuesday’s action, the Dow Jones Industrial Average rose 22.40 points, or 0.1%, to 17,251.53. The S&P 500 fell 0.2% to 2015.93 and the Nasdaq Composite was off 0.4% at 4728.67.

Inflation remains subdued
A Labor Department report showed US wholesale prices fell 0.2% in February, after a 0.1% increase the prior month. In the 12 months through February, the producer price index was steady.

A separate report showed that US retail sales fell 0.1% last month, following a 0.4% decline in January that was previously reported as a 0.2% increase.

"The economy's engines are not going into reverse ... but at the moment, it is hard to see GDP with a 2% handle," Chris Rupkey, chief economist at MUFG Union Bank in New York, told Reuters.

"Based on today's lacklustre sales report, policymakers will be in no hurry to raise interest rates."

In Europe, the Stoxx 600 Index ended the session with a 1.1% retreat from the previous close, led by a decline in commodity and energy stocks. The UK's FTSE 100 Index slid 0.6%, as did Germany's DAX Index, while France's CAC 40 Index dropped 0.8%.

Meanwhile, Bank of Japan policy makers kept monetary policy unchanged after a two-day review, maintaining negative rates and an asset purchase program, as most economists had expected, but seemed more pessimistic about the outlook.

"We're clearly seeing the effect of the [negative rate] policy on interest rates," Bank of Japan Governor Haruhiko Kuroda told a news conference, Reuters reported. "The effect will spread to the economy and prices from now on."

Japan's Nikkei 225 Index closed 0.7% lower in Tokyo.

"Overall, the impression we get from the BOJ's latest policy statement is that the central bank is already de-emphasising negative interest rates as a policy tool, in response to its poor reception by markets and the public," HSBC said in a research note, according to Reuters.

(BusinessDesk)