US open: Dow drops 160 points as investors remain jittery ahead of FOMC meeting

US stocks opened lower on Tuesday, as investors moved cautiously ahead of the two-day Federal Open Market Committee meeting that concludes on Wednesday.

Just after 10:00 in New York, the Dow Jones Industrial Average was down 158 points, while the S&P 500 and the Nasdaq lost 11 and 13 points respectively.

Wall Street started the week in positive fashion, as weak data fuelled speculations that the Federal Reserve might delay its interest rate hike.

“The rally in US stocks following disappointing data on Monday shows we’re back to ‘bad news is good news’,” said CMC Markets analyst Jasper Lawler.

“The US dollar fell and stocks rallied on Monday when manufacturing and industrial production data missed expectations and raised hopes that the Fed may choose to hold off on ending its forward guidance of zero-percent interest rates.”

Construction on new US homes fell 17% in February, as severe winter weather hit the country’s Midwest and Northeast regions.

In February, housing starts dropped to an annual rate of 897,000 from a revised 1.08m in January, against expectations of a 1.04m reading.

Meanwhile, permits for new construction, a key indicator of future housing demand, rose to an annual rate of 1.09m from an upwardly revised reading of 1.06m in the previous month.

In company news, American Airlines Group jumped 6% after Standard & Poor’s announced late on Monday that the airline will be included in the S&P 500 index.

Discount retailer Burlington climbed almost 4% after its fourth quarter profit and revenue beat Wall Street’s expectations, while outdoor sports gear group Black Diamond soared 28.5% after being upgraded from ‘hold’ to ‘buy’ by Stifel Nicolaus.

Going the other way, alternative energy provider PlugPower plummeted over 10% after its fourth quarter sales missed estimates, while the loss for the period widened more than expected.

Gold futures fell 0.87% to $1,143.20, while the dollar climbed 0.3% against the pound but relinquished 0.1% and 0.7% against the yen and against the euro respectively.

Oil prices continued to slide, with Brent crude shedding 2.16% to $52.80 a barrel, while West Texas Intermediate crude lost 1.48% to $43.24 a barrel.