Stocks slip as Fed starts stimulus discussion

4:57 PM, Dec 17, 2013   |    comments
Traders gather at a post on the floor of the New York Stock Exchange on Aug. 27, 2013. (Photo: Richard Drew, AP)
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NEW YORK (AP) - Stocks were mixed in afternoon trading Tuesday, as investors waited to hear from the Federal Reserve.

Good news on the U.S. economy, including a blockbuster jobs report and a budget deal in Washington, appear to increase the likelihood that the Fed could dial back its huge bond-buying program as early as this week. Investors find out Wednesday, at the end of the Fed's two-day policy meeting.

KEEPING SCORE: The Dow Jones industrial average edged up eight points, or 0.1 percent, to 15,893  as of 3:15 p.m. Eastern time. The Standard & Poor's 500 index fell three points, or 0.2 percent, to 1,783. The tech-heavy Nasdaq composite rose less than a point, or 0.01 percent, to 4,029.

'LIKE' THE HIGH: Facebook hit a record high of $55.18 after it tested video advertisements for users' news feeds, a potential source of revenue. The stock debuted at $38 a share in May 2012.

POSTING GAINS: 3M was a top gainer in the Dow. Its stock climbed $3.77, or 3 percent, to $131.43 after the maker of Post-it notes raised its dividend 35 percent. The company also forecast solid earnings next year.

THE FED EFFECT: The stock market has surged this year as the Fed keeps buying $85 billion in bonds every month to keep long-term interest rates low. The economy has steadily improved and companies have been making more money. That has helped push the S&P 500 index up almost 25 percent, putting it on track for its best performance in a decade.

ROOM FOR OPTIMISM: The strong economy and healthy earnings provide a good backdrop for stocks, says Liz Ann Sonders, chief investment strategist at Charles Schwab. "Dips that we get are not going to be terribly severe," Sonders says.

NO CORRECTION: The S&P 500 has gone without a correction, defined as a decline of 10 to 20 percent, since October 2011.

BIGGEST WINNERS: Frontier Communications rose the most in the S&P 500. Shares surged 42 cents, or 10 percent, to $4.82 after the company reached a deal to acquire AT&T's fixed-line business in Connecticut for about $2 billion.

AND LOSERS: Delta Air Lines fell the most, down 91 cents, or 3 percent, to $27.

FLAT PRICES: U.S. consumer prices remained flat in November, held down by falling gas prices. The consumer price index fell 0.1 percent in October.

OTHER MARKETS: The yield on the 10-year Treasury note dropped to 2.84 percent from 2.88 percent on Monday. The price of gold fell $13.70, or 1 percent, to $1,230.70 an ounce.

ON DECK: The Fed will also release economic projections and hold a news conference on Wednesday. Several big U.S. companies are due to report quarterly earnings this week, including FedEx, Oracle Corp and Neiman Marcus.

(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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