By Ryan Vlastelica
NEW YORK (Reuters) – Stocks mostly fell on Tuesday as the Federal Reserve opened a two-day policy meeting, which is being closely watched for signs of when the U.S. central bank will raise interest rates.
Trading was volatile in other asset classes. Crude oil prices edged lower and remained on track for their eighth decline in the past nine sessions, but were well off lows of the day. The U.S. dollar index turned flat, rebounding off earlier weakness.
European equity markets retreated from gains built on the euro’s decline, which cheapens the price of exports from the euro zone. London’s market <.ftse> was an exception, and Asian markets ended higher.
U.S. crude oil
Investors were awaiting the release of the Fed’s policy statement on Wednesday afternoon. Many analysts expect the Fed to remove the word “patient” from its statement to describe its approach to raising rates later in the year. Doing so would put the Fed a step closer to its first rate hike since 2006.
Economists polled by Reuters are almost evenly split on whether a rate increase will come in June or later in the year. Recent U.S. data, including Tuesday’s on February housing starts, has fuelled talk that the Fed will remain on hold as long as possible.
“A lot of today’s decline is speculation on how the Fed will respond, along with the sense that (U.S.) growth is weak,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
The Dow Jones industrial average <.dji> fell 137.69 points, or 0.77 percent, to 17,839.73, the S&P 500 <.spx> lost 9.54 points, or 0.46 percent, to 2,071.65, and the Nasdaq Composite <.ixic> dropped 4.05 points, or 0.08 percent, to 4,925.46.
The MSCI International ACWI price index <.miwd00000pus> slipped 0.2 percent while European shares <.fteu3> ended 0.7 percent lower, a day after hitting a 7-1/2-year high.
The benchmark 10-year U.S. Treasury note
The euro rose 0.2 percent to $ 1.0592, having earlier risen as much as 0.8 percent. Earlier this week, the euro dropped to a 12-year low of $ 1.0457
The U.S. dollar index, which measures the greenback against a basket of major currencies, was flat at 99.612. On Monday, the index posted its biggest drop in more than a month.
(Editing by Dan Grebler and Leslie Adler)