UKX FTSE 100 Index

By Sue Chang and Chris Matthews, MarketWatch

The Fed holds its second interest-rate policy meeting of the year

U.S. stocks rose Tuesday but came off earlier highs as investors parsed a pair of conflicting reports on U.S.-China trade talks. However, the Dow Jones Industrial Average is poised to extend its winning streak to five sessions with Federal Reserve policy makers convening a two-day policy meeting.

How are the benchmarks faring?

The Dow Jones Industrial Average rose 50 points, or 0.2%, to 25,964, while the S&P 500 added 7 points, or 0.3%, to 2,840. The Nasdaq Composite Index advanced 32 points, or 0.4%, to 7,746.

What's driving the market?

A Bloomberg News report that China is pushing back against U.S. demands for concessions (https://www.bloomberg.com/news/articles/2019-03-19/some-u-s-officials-see-china-walking-back-trade-pledges) in bilateral trade talks dampened market sentiment with major indexes trimming earlier gains. Chinese officials are reportedly indicating that the U.S. has not made sufficient assurances that President Donald Trump's administration will lift tariffs on Chinese goods despite Beijing agreeing to changes in their intellectual property regulations.

However, that news was quickly followed by a Wall Street Journal scoop that the two countries are in the final stages of negotiations with U.S. Representative Robert Lighthizer and Secretary of Treasury Steven Mnuchin scheduled to fly to Beijing next week (https://www.wsj.com/articles/lighthizer-mnuchin-to-travel-to-beijing-11553015413?).

Investors are also on standby for the Fed's policy decision on Wednesday. No changes in rates are expected but market participants will focus on remarks by Chairman Jerome Powell at his news conference and policy makers' forecasts of future rate moves. Of particular interest is whether the Fed will announce plans to bring its balance-sheet runoff effort to an early end.

See:Fed seen revealing 'how and when' it will stop shedding balance sheet assets (http://www.marketwatch.com/story/fed-seen-revealing-how-and-when-it-will-stop-shedding-balance-sheet-assets-2019-03-18)

Also read:Here are 3 things to watch when the Fed unveils its latest dot plot (http://www.marketwatch.com/story/fed-doesnt-want-anyone-paying-attention-to-the-dot-plot-but-here-are-3-things-investors-wont-want-to-miss-2019-03-15)

New orders for American-made goods rose 0.1% in January, the Commerce Department reported. The growth was below the 0.4% increase in factory orders expected by economists polled by MarketWatch, and matches the 0.1% increase in December.

What are analysts saying?

Cliff Hodge, director of investments for Cornerstone Wealth, urged investors to "ignore the headline" following the loss of market's momentum in the wake of trade news.

"With conflicting signals coming from both sides on trade, it is understandable that investors are on edge. Equity markets have rallied from the December lows on positive developments on trade, and a Fed on hold. In our mind, both of these narratives are priced in," he said. "If something were to change on either front, it would open up the markets to increased volatility in the days and weeks ahead."

"It's been a fairly stable trading environment, as the market has largely built in expectations that we'll get some kind of deal with China and it isn't anticipating any changes to interest-rate policy from the Fed," Patrick Healey, president of Caliber Financial Partners, told MarketWatch.

"The Federal Reserve begin their two day meeting today, and some dealers are anticipating a neutral update from the U.S. central bank," said David Madden, market analyst at CMC Markets UK, in a note. "In recent months, the Fed have rowed back on their hawkish rhetoric and have moved more towards a middle-of-the-road position, and an absence of hawkish language is likely to lift investment sentiment."

What stocks are in focus?

Shares of Michaels Cos. (MIK) jumped 11%, after the arts-and-crafts retailer reported fiscal fourth-quarter earnings and revenue (http://www.marketwatch.com/story/michaels-cos-stock-soars-4-premarket-as-quarterly-earnings-beat-offsets-soft-guidance-2019-03-19) that surpassed Wall Street expectations, though the company disappointed in its 2019 outlook.

DSW Inc. (DSW) shares sank 13% after the discount footwear retailer reported fiscal 2018 earnings (http://www.marketwatch.com/story/dsw-stock-plunges-after-full-year-adjusted-profit-misses-expectations-2019-03-19) that fell short of analysts' forecasts.

Shares of Nvidia Corp. (NVDA) rose 4.6% after the company announced that Amazon.com Inc. (AMZN) would now be using its T4 data-center chips (http://www.marketwatch.com/story/nvidia-bags-amazon-web-services-in-its-latest-data-center-chip-push-2019-03-18).

Revlon Inc. (REV) shares slid 4.9% after the cosmetics maker reported unaudited fourth-quarter and 2018 earnings (http://www.marketwatch.com/story/revlon-stock-tanks-after-beauty-company-finds-material-weakness-in-its-controls-misses-views-2019-03-18), saying it spotted a "material weakness" in its internal controls over financial reporting for 2018. The company said it would file its 2018 Form 10-K no later than March 29, while saying that financial results aren't expected to change.

Shares of Chesapeake Energy Corp. (CHK) rose 1.3% after Raymond James analyst James Freeman raised his target price (http://www.marketwatch.com/story/chesapeake-energys-stock-surges-after-bullish-analyst-call-crude-oil-rally-2019-03-19) on the stock from $4 to $4.50.

How are other markets trading?

Asian stocks were muted (http://www.marketwatch.com/story/asian-markets-muted-awaiting-upcoming-fed-meeting-2019-03-18), with Japan's Nikkei 225 edging 0.1% lower, China's Shanghai Composite Index falling 0.2%, and Hong Kong's Hang Seng Index adding 0.2%.

In Europe, stocks rose with the Stoxx Europe 600 adding 0.6%.

Crude oil turned weak (http://www.marketwatch.com/story/oil-prices-extend-climb-to-multimonth-highs-as-opec-supply-appears-in-check-2019-03-19) while the price of gold settled higher and the U.S. dollar lost ground (http://www.marketwatch.com/story/dollar-slides-for-seventh-out-of-eight-sessions-ahead-of-fed-update-2019-03-19) versus major rivals.

--William Watts contributed to this article

(END) Dow Jones Newswires

March 19, 2019 14:15 ET (18:15 GMT)

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