US open: Equity markets edge lower as FOMC decision looms

US stocks edged lower early on Thursday, as investors avoided big bets on the Federal Reserve’s day of reckoning.

Shortly before 1500 BST, the Dow Jones Industrial Average was down 39 points to 16,701.00 while the S&P 500 and the Nasdaq were both two points lower.

At 1900 BST, the US central bank will announce whether it will hike interest rates for the first time since 2006 or whether it has decided to sit tight for a while longer.

“Traders are clearly sitting on the fence until the Fed’s announcement this evening,” said IG’s market analyst David Madden.

“Dealers are very cautious today, and the fear of hawkish commentary in the press conference after is keeping the buyers at bay.

“No change to the interest rate has been heavily priced in, but the dealers know deep down what the US central bank is drifting towards and that is holding them back from buying.”

Unemployment claims decline

According to the Labor Department, new unemployment claims declined by 11,000 to 264,000 in the week to 12 September, to reach their lowest level since mid-July. Analysts had expected jobless claims to hold steady at 275,000.

Elsewhere, housing starts fell 3% last month to 1.13m, against expectations for a decline to 1.16m, while housing starts in July suffered a drastic downward revision to show a 4.1% drop to 1.16m from the prior estimate of a 0.2% gain to 1.21m.

Official figures showed the deficit declined to a preliminary $109.7bn, amounting to 2.5% of the country’s gross domestic product (GDP), in the second three months of 2015 from an upwardly revised $118.3bn, which represented 2.7% of the GDP in the first quarter.

In company news, Cablevision Systems surged 16.1% after European cable group Altice announced it would buy the US firm in a $10bn deal.

Apple slid 0.98% after reports claimed the tech giant had secured mapping visualisation startup Mapsense for a fee of between $25m to $30m.

Elsewhere, Asian stocks remained in positive territory for the second consecutive day, although Chinese equities relinquished early gains and closed in the red.

European markets were broadly flat ahead of the Fed’s decision, while oil prices were mixed. West Texas Intermediate lost 0.46% to $47.37 a barrel, while Brent shed 0.24% to $49.63 a barrel.

The dollar gained 0.24% against the yen but lost 0.29% and 0.12% against the euro and the pound respectively, while gold futures fell 0.26% to $1,116.10.