US open: Stocks edge higher ahead of Fed's statement

US equities edged higher early on Wednesday, as investors awaited a statement from the Federal Reserve that could shed light over the timing of the first rate hike.

Just after 1500 BST Dow Jones Industrial Average was 28 points up to 17,658.06, while the S&P 500 and the Nasdaq were four and 12 points higher respectively.

FOMC meeting in focus

The two-day Fed meeting comes to an end on Wednesday and the US central bank is expected to release a brief statement at 1900 BST. While a change in policy is unlikely, the FOMC announcement is going to be closely watched by investors and could spark volatility in the market.

“The main argument against a rate hike this year is that inflation is currently below target and we’re not seeing the kind of spending from consumers to be confident of future price increases,” said Oanda’s senior market analyst Craig Erlam.

“The argument for assumes that with good wage growth, low unemployment and less slack in the economy, price inflation will naturally follow.

“With that in mind, a rate hike this year and a more gradual pace of hikes in the future is less of a threat than potentially having to hike them at a faster pace next year.”

Wednesday data

Applications for US home mortgages grew last week, data released on Wednesday showed.

The Mortgage Bankers Association (MBA) said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, climbed 0.8% in the week ended 24 July.

Meanwhile, US pending home sales fell unexpectedly in June, with index from the National Association of Realtors declined 1.8% month-on-month in June, pulling back from a nine-year high to settle at 110.3.

Elsewhere, European stocks were in the black following a stabilisation in China’s equity markets and a slew of well-received earnings reports.

The dollar fell 0.34% against the pound but was flat against the yen and rose 0.29% against the euro, while gold futures slid 0.18% to $1,094.20.

Oil prices fell, with West Texas Intermediate losing 0.86% to $47.57 a barrel, while Brent shed 0.62% to $52.97 a barrel.

Twitter plunges

In company news, Gilead Sciences rose 4.14% after posting better-than-expected results late on Tuesday, while Citrix Systems jumped 7.4% after its quarterly results beat expectations.

Going the other way, Twitter plunged 9.55% after investors were left unimpressed late on Tuesday by the group’s user growth, while health benefit group Anthem slid 0.96% despite posting better-than-expected results.

Internet group Yelp tanked 27.1% after swinging to a second-quarter loss of $1.3m from a profit of $2.7m a year ago.

The company also slashed its full-year sales outlook to a range of $544m to $550m from $574m to $579m previously.

Social media giant, Facebook, will report after the close, along with Whole Foods Market.