* Markets await Fed meeting, data on U.S. and China
* Brent oil holds above $113 a barrel
* US consumer confidence data dents enthusiasm
NEW YORK, Jan 29 U.S. stocks were mixed, U.S.
Treasury prices edged up and the dollar fell to a 14-month low
against euro on Tuesday, with investors cautious about a two-day
Federal Reserve policy meeting.
Investors were also reluctant to make big bets on some mixed
U.S. economic data, given the run-up in stocks in recent weeks
and risk in the form of a slew of economic reports throughout
the week and the Fed meeting, which ends on Wednesday.
U.S. consumer confidence dropped in January to its lowest in
more than a year as Americans were more pessimistic about the
economic outlook and their financial prospects, according to a
private sector report released on Tuesday.
That followed a report that showed U.S. single-family home
prices rose in November, building on a string of gains that
point to a housing market that is on the mend..
"There is a serious split between the attitudes of consumers
and the attitudes of the markets," said Joseph Trevisani, chief
market strategist at WorldWideMarkets, in Woodcliff Lake, New
Jersey, after the consumer confidence data. "This may make for a
weaker dollar as it makes it less likely the Fed will
contemplate an early removal of QE," referring to the central
bank's debt-buying program.
The euro extended gains versus the dollar, breaking above
key resistance to hit a 14-month high. It last traded at
In the U.S. Treasury debt market, benchmark 10-year yields
proved unable to hold above the key 2 percent level touched on
Monday, with investors looking ahead to a debt auction later in
the day as well as the Fed meeting.
The 10-year U.S. Treasury note was up 1/32, the
yield at 1.9614 percent.
Debt prices reversed early losses to advance after the
consumer confidence data.
"This is a reflection of the increase of the payroll tax
with the tax holiday going away," said Craig Dismuke, chief
economic strategist with Vining Sparks in Memphis, Tennessee.
"This is a big concern. This could cut 0.5 percentage point
off first-quarter GDP," he added.
STOCKS EDGE HIGHER
The Dow Jones industrial average was up 37.01 points,
or 0.27 percent, at 13,918.94. The Standard & Poor's 500 Index
was up 1.98 points, or 0.13 percent, at 1,502.16. The
Nasdaq Composite Index was down 10.92 points, or 0.35
percent, at 3,143.38.
"We need to slow down and digest the huge move we've had,"
said Christian Wagner, chief executive officer at Longview
Capital Management in Wilmington, Delaware.
Recent gains in stocks have largely come on a strong start
to the corporate earnings season, and that trend continued on
Tuesday with positive results from both Ford Motor Co and
European equities steadied near two-year highs, with weaker
banking and technology shares offsetting positive sentiment
after a strong start to the earnings season and a brightening
The benchmark FTSEurofirst 300 index was up 0.25
percent. The index is up nearly 24 percent from its June lows,
but may not move substantially higher in the coming days.
Gains across Asian markets, led by a big rally in Australian
shares, helped to lift MSCI's world equity index
0.34 percent to near a 20-month high.
Peter Sullivan, head of European Equity Strategy at HSBC in
London, said the past 9 weeks have seen steady equity inflows
from retail investors after four years dominated by outflows.
Sullivan said these new equity flows were going primarily
into emerging markets and Europe but they did not yet represent
a full switch from bonds to equities. "Bond flows remain
positive, they are just at a reduced level," he said.
Investors now await the outcome of the two-day Federal
Reserve policy meeting. The Fed is not expected to change its
stance after deciding only in December to loosen conditions
further. However, investors are watching to see if changes in
the membership of the policy-setting committee for 2013 could
signal a shift in the future.
Gold snapped a four-day losing streak to rise 0.3 percent to
around $1,660.90 an ounce, but any hint that the Fed is
considering an end to its loose monetary policy would probably
send the precious metal down.
Brent crude and U.S. oil prices were mixed, but movements
were limited, with Brent crude up 39 cents to $113.87 a
barrel and U.S. crude rising $1.04 to $97.48.