U.S. stocks end mixed as market awaits Fed decision; Dow dips 0.01%

U.S. stocks finished Monday mixed as investors avoided equities ahead of the Federal Reserve's Wednesday announcement on monetary policy, while spotty quarterly earnings and economic indicators also kept market participants on the sidelines.

At the close of U.S. trading, the Dow Jones Industrial Average finished down 0.01%, the S&P 500 index rose 0.13%, while the Nasdaq Composite index fell 0.08%.

The Federal Reserve will announce its latest decision on monetary policy and interest rates on Wednesday, and while many investors are expecting the U.S. central bank to leave its USD85 billion monthly asset-purchasing program unchanged, most remained out of equities markets to await the announcement and accompanying language.

Monthly asset purchases aim to drive recovery by pushing down interest rates, boosting stock prices in the process.

Data released earlier failed to act as a clearly visible market weather vane.

The Federal Reserve reported earlier that U.S. industrial production rose by a 0.6% in September, above expectations for a 0.4% rise and the fastest increase in seven months. 

Elsewhere, industry data revealed that U.S. pending home sales fell 5.6% last month, down for the fourth consecutive month and well below market calls for a gain of 0.1%.

Meanwhile on the earnings front, Merck reported profits that beat market expectations, however, revenue missed market consensus, though JCPenney stocks brought up retailers in general after the company issued a bullish sales forecast.

Leading Dow Jones Industrial Average performers included Procter & Gamble, up 1.67%, Coca-Cola, up 1.50%, and Wal-Mart Stores, up 1.48%.

The Dow Jones Industrial Average's worst performers included Merck, down 2.53%, United Technologies, down 1.40%, and UnitedHealth, down 1.04%.

European indices, meanwhile, finished largely lower.

After the close of European trade, the EURO STOXX 50 fell 0.35%, France's CAC 40 fell 0.48%, while Germany's DAX 30 fell 0.08%. Meanwhile, in the U.K. the FTSE 100 finished up 0.07%.

On Tuesday, the U.S. is to produce data on retail sales as well as its producer price index and a report on consumer confidence.

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Forex - Dollar firms on U.S. industrial output data, eyes Fed meeting

The dollar rose against most major currencies on Monday after industrial production data beat expectations though gains were limited as investors remained camped on the sidelines to await the Federal Reserve's decision on monetary policy on Wednesday.

In U.S. trading on Monday, EUR/USD was up 0.01% at 1.3807.

The Federal Reserve reported on Monday that U.S. industrial production rose by a 0.6% last month, above expectations for a 0.4% rise and the fastest increase in seven months. 

The news gave the dollar some support, though investors remained cautious ahead of the Fed's upcoming two-day policy meeting that opens on Tuesday.

A string of disappointing economic reports has cemented expectations that the central bank will maintain the current pace of its USD85 billion in monthly asset purchases into early next year.

Asset purchases aim to spur recovery by driving down long-term borrowing costs, weakening the dollar in the process.

Still, the upbeat industrial output number gave investors some hope that sooner or later, the Fed will begin to taper the pace of its stimulus program, which would give the dollar support afterwards. 

Elsewhere, industry data revealed that U.S. pending home sales fell 5.6% last month, down for the fourth consecutive month and well below market calls for a gain of 0.1%, which capped the dollar's advance somewhat.

The greenback was up against the pound, with GBP/USD down 0.03% at 1.6162.

In the U.K., Bank of England policymaker David Miles said Monday that raising interest rates before there was a “meaningful” reduction in the unemployment rate would be "pretty catastrophic," which softened the pound.

Elsewhere, the pair shrugged off a Confederation of British Industry report that found just 2% of retailers reported an increase in sales in October, down from 34% in September. 

The dollar was up against the yen, with USD/JPY up 0.24% at 97.64, and up against the Swiss franc, with USD/CHF up 0.18% at 0.8942.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.12% at 1.0439, AUD/USD down 0.02% at 0.9582 and NZD/USD trading up 0.31% at 0.8304.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.04% at 79.29.
On Tuesday, the U.S. is to produce data on retail sales as well as its producer price index and a report on consumer confidence.

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Forex - GBP/USD dips as market applauds U.S. industrial output data

The pound edged lower against the dollar on Monday after official data revealed activity in U.S. factories, mines and utilities was stronger in September than many were guessing.

In U.S. trading on Monday, GBP/USD was trading at 1.6158, down 0.06%, up from a session low of 1.6125 and off from a high of 1.6208.

Cable was likely to find support at 1.6116, Tuesday's low, and resistance at 1.6247, Friday's high.

The Federal Reserve reported on Monday that U.S. industrial production rose by a 0.6% last month, above expectations for a 0.4% rise and the fastest increase in seven months. 

The news gave the dollar some support, though investors remained cautious ahead of the Fed's upcoming policy meeting later in the week.

A string of disappointing economic reports has cemented expectations that the central bank will maintain the current pace of its USD85 billion in monthly asset purchases into early next year.

Asset purchases aim to spur recovery by driving down long-term borrowing costs, weakening the dollar in the process.

Still, the upbeat industrial output number gave investors some hope that sooner or later, the Fed will begin to taper the pace of its stimulus program, which would give the dollar support afterwards. 

Elsewhere, industry data revealed that U.S. pending home sales fell 5.6% last month, down for the fourth consecutive month and well below market calls for a gain of 0.1%, which capped the dollar's advance somewhat.

Meanwhile in the U.K., Bank of England policymaker David Miles said Monday that raising interest rates before there was a “meaningful” reduction in the unemployment rate would be "pretty catastrophic," which softened the pound.

Elsewhere, the pair shrugged off a Confederation of British Industry report that found just 2% of retailers reported an increase in sales in October, down from 34% in September. 

The pound, meanwhile, was down against the euro and up against the yen, with EUR/GBP up 0.08% at 0.8545 and GBP/JPY up 0.18% at 157.76.

On Tuesday, the U.K. is to publish data on net lending to individuals.

The U.S. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to publish data on producer price inflation and a report on consumer confidence, a leading economic indicator.

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Dollar hits session highs vs. yen, euro after U.S. data

The dollar touched session highs against the yen and the euro on Monday after data showed that U.S. industrial production rose at the fastest pace in seven months in September.

The dollar found support after data showed that U.S. industrial production rose by a seasonally adjusted 0.6% last month, above expectations for a 0.4% rise.

The dollar gained ground against the yen, with USD/JPY rising 0.35% to 97.74. 

The dollar’s gains were held in check ahead of the Federal Reserve’s upcoming policy meeting later in the week after recent disappointing economic data cemented expectations that the central bank will maintain the current pace of its asset purchase program into the first quarter of next year.

The euro pulled away from Friday’s 23-month highs against the dollar, with EUR/USD sliding 0.21% to 1.3776.

The dollar rose to session highs against the traditional safe haven Swiss franc, with USD/CHF up 0.39% to 0.8960.

The dollar also pushed higher against the pound, with GBP/USD losing 0.15% to trade at 1.6143.

The greenback erased losses against its Australian counterpart, withAUD/USD down 0.19% to 0.9565. The greenback was almost unchanged against the New Zealand and Canadian dollars, with NZD/USD dipping 0.01% to 0.8280 and USD/CAD edging down 0.05% to 1.0446.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.20% to 79.42.

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U.S. industrial production rose 0.6% in September

Industrial production in the U.S. rose more than expected in September, official data showed on Monday.

In a report, the U.S. Federal Reserve said that industrial production rose by a seasonally adjusted 0.6% last month after a 0.4% rise in August. Economist had expected the rate of industrial production to remain unchanged at 0.4%.

The report showed that the capacity utilization rate, a measure of how fully firms are using their resources, ticked up to 78.3% in September from an upwardly revised 77.9% in August. Economists had expected the capacity utilization rate to tick up to 78.0%.

The report was released 11 days behind schedule due to disruption caused by the recent 16-day U.S. government shutdown.

Following the release of the data, the U.S. dollar remained steady near 23-month lows against the euro, with EUR/USD dipping 0.11% to 1.3788.

Meanwhile, the outlook for U.S. equity markets remained mixed. The Dow Jones Industrial Average futures indicated a rise of 0.39% at the open, S&P 500 futures pointed to a dip of 0.02% and Nasdaq 100 futures indicated an uptick of 0.10%.

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Forex - Pound edges lower vs. dollar in quiet trade

The pound edged lower against the dollar in quiet trade on Monday as expectations that the Federal Reserve will put off plans to start reducing stimulus continued to weigh on the dollar.

GBP/USD hit 1.6156 during European afternoon trade, the session low; the pair subsequently consolidated at 1.6158, edging down 0.07%.

Cable was likely to find support at 1.6114, the low of October 22 and resistance at 1.6255, the high of October 23.

The U.S. was to release data on industrial production and pending home sales later Monday. 

Market participants were also looking ahead to the Fed’s upcoming policy meeting later in the week after recent disappointing economic data cemented expectations that the central bank will maintain the current pace of its asset purchase program into the first quarter of next year.

Data on Friday showed that an index of U.S. consumer sentiment was revised down to a 10-month low in October on concerns over the economic impact of the recent 16-day government shutdown.

The pound had little reaction after a report compiled by the Confederation of British Industry said just 2% of retailers reported an increase in sales in October, down from 34% in September. 

Demand for sterling continued to be underpinned after data on Friday showed that the U.K. economy grew at the fastest pace in three years in the third quarter.

The Office of National Statistics said the U.K. economy expanded by 0.8% in the three months to September and grew 1.5% on a year-over-year basis.

Elsewhere, sterling was almost unchanged against the euro, withEUR/GBP dipping 0.04% to 0.8534.

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