MARKET SNAPSHOT: Stock Market Strikes Cautious Tone As Fed Meeting Starts; Nasdaq Touches Record

By Sue Chang, MarketWatch , Ryan Vlastelica Features Dow Jones Newswires

Federal Reserve starts 2-day policy meeting

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U.S. stocks were little changed on Tuesday although the Nasdaq briefly touched a record high, as trading turned skittish ahead of the Federal Reserve's two-day policy meeting.

The Dow Jones Industrial Average rose 31 points, or 0.2%, to 20,945. The S&P 500 index edged up a point to 2,389.

The Nasdaq Composite Index gained 4 points to 6,096. Earlier, the teach-heavy benchmark set an intraday record of 6,102.72, its second such feat in the past two days.

The Nasdaq was supported by Apple Inc. (AAPL), the largest U.S. company by market cap, which rose 0.7% and hit a record of its own. The iPhone maker was set to report quarterly earnings after the closing bell. See:Apple earnings preview (http://www.marketwatch.com/story/apple-services-likely-to-top-7-billion-this-quarter-2017-04-26).

Read:The annual Apple cash bonanza is here--will $300 billion be enough? (http://www.marketwatch.com/story/the-annual-apple-cash-bonanza-is-here-will-300-billion-be-enough-2017-05-02)

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"The big-picture supports for stocks that we were hoping will drive healthy returns remain in place, but we think that the near-term risk-reward might be getting less exciting," said Mislav Matejka, an equity strategist at J.P. Morgan Cazenove, in a note.

"Some of the positive catalysts we have been looking for, such as a robust earnings season and the easing in political tail risks, have delivered and are now behind us," he said, adding that there are several red flags, including general complacency among investors and weaker commodity prices.

Read:This key transportation gauge may be signaling a stock-market derailment (http://www.marketwatch.com/story/this-key-transportation-gauge-may-be-signaling-a-stock-market-derailment-2017-05-01)

The Citigroup Economic Surprise Index, which tracks economic data beats and misses, is also in negative territory, indicating a potential 10% downside risk for stocks, according to the strategist.

Earnings: A raft of corporate quarterly results hit ahead of the opening bell. Shares of Merck & Co. Inc.(MRK) climbed 0.4% (http://www.marketwatch.com/story/mercks-stock-jumps-after-profit-and-sales-beat-raised-guidance-2017-05-02) while those of fellow drugmaker Pfizer Inc.(PFE) shed 1.2% (http://www.marketwatch.com/story/pfizer-reports-q1-profit-beat-revenue-miss-2017-05-02).

Luxury-goods retailer Coach Inc.(COH) popped 10% after it reported results that topped analyst forecasts.

Lumber Liquidators Holdings Inc.(LL) plummeted 18% after posting a bigger loss than forecast (http://www.marketwatch.com/story/lumber-liquidators-earnings-miss-expectations-sales-rise-2017-05-02).

Aetna Inc.(AET) added 0.8% after the health-care company's adjusted earnings topped expectations (http://www.marketwatch.com/story/aetna-swings-to-quarterly-loss-revenue-falls-short-of-estimates-2017-05-02).

Shares of ConocoPhillips(COP) lost 2.4% after the oil company unexpectedly swung to a loss in the first quarter.

Check out:7 must-watch earnings reports this week (http://www.marketwatch.com/story/7-must-watch-earnings-reports-over-the-next-week-2017-04-29)

Stock movers: Shares of Advanced Micro Devices Inc.(AMD) tumbled 19% a day after it announced a $73 million quarterly loss (http://www.marketwatch.com/story/amd-plunges-more-than-7-after-announcing-largely-in-line-quarterly-earnings-2017-05-01).

Shares of Angie's List Inc.(ANGI) soared 61% after IAC/InterActiveCorp.(IAC) late Monday confirmed it is buying the consumer-recommendation website for $8.50 a share (http://www.marketwatch.com/story/iac-to-buy-angies-list-for-850share-to-combine-it-with-homeadvisor-2017-05-01). Shares of IAC rose 17%.

Economic news: The Fed will release its policy statement at the conclusion of its two-day meeting Wednesday at 2 p.m. Eastern Time. While the central bankers are expected to keep rates on hold at this meeting, analysts are looking for any comments on the recent slowdown in U.S. economic activity. The U.S. gross domestic product for the first quarter grew 0.7%, the slowest pace in three years, data out on Friday showed (http://www.marketwatch.com/story/us-economy-posts-slowest-growth-in-three-years-first-quarter-gdp-shows-2017-04-28).

The U.S. central bank is currently expected to raise rates two more times this year.

Read:Fed to signal rate-hike plan in place despite soft economic data (http://www.marketwatch.com/story/fed-to-signal-rate-hike-plan-in-place-despite-soft-economic-data-2017-04-27)

There are no major economic data releases on the calendar for Tuesday, but monthly auto sales are expected to trickle out through the day.

Other markets:European stock markets (http://www.marketwatch.com/story/european-stocks-get-a-lift-from-upbeat-factory-data-greek-bailout-deal-2017-05-02) returned from the May Day bank holiday in an upbeat mood, after Greece agreed to a bailout deal with its international creditors (http://www.marketwatch.com/story/greece-and-its-creditors-agree-to-bailout-package-2017-05-02).

Read:Euro rises after Greece agrees bailout deal with creditors (http://www.marketwatch.com/story/euro-rises-after-greece-agrees-bailout-deal-with-creditors-2017-05-02)

Stock markets in Asia closed mainly higher (http://www.marketwatch.com/story/asian-markets-get-a-lift-from-rally-in-tech-stocks-2017-05-01), lifted by regional tech companies.

Oil prices (http://www.marketwatch.com/story/oil-prices-claw-off-five-week-lows-with-help-from-softer-dollar-2017-05-02) retreated, while metals were mixed. The ICE Dollar Index was flat.

--Sara Sjolin contributed to this article.

(END) Dow Jones Newswires

May 02, 2017 12:26 ET (16:26 GMT)