US open: Stocks fluctuate ahead of FOMC meeting

US stocks struggled for direction early on Tuesday, as investors remained cautious ahead of the upcoming Federal Reserve meeting, while the impasse surrounding Greece showed no sign of resolving.

Just after 15:00 BST, the Dow Jones Industrial Average was up 60 points, while the S&P 500 and the Nasdaq lost one and three points respectively.

Greek impasse continues

European markets continued to decline on Tuesday, while German government bond prices rose and Greek debt was battered as negotiations between Athens and its creditors remain deadlocked, spurring fears that the country could default on its debt.

“Unless the EU backs down we could see Greece fail to make its payments to the IMF at the end of this month,” said Michael Hewson, chief market analyst at CMC Markets UK.

“Irrespective of what happens in the coming days there doesn’t appear to be any mechanism in place that would allow for Greece to be pushed out.”

Despite the woes surrounding Athens, the dollar registered only marginal gains against the euro, climbing 0.17% against the currency.

The greenback was flat against the yen and lost 0.18% against pound, while gold futures fell 0.57% to $1,179.10.

Oil prices edged higher, with West Texas Intermediate rising 0.53% to $59.84 a barrel, while Brent gained 0.22% to $64.09 a barrel.

Tuesday data

Away from Greece-fuelled worries, investors will focus on the Federal Open Market Committee’s two-day meeting that kicks off later Tuesday.

“This is a huge event this week and could offer great insight into whether the latest data has been enough to warrant a rate hike at the next meeting in September,” said Oanda’s senior market analyst Craig Erlam.

According to the Department of Commerce, US housing starts dropped 11.1% month-on-month in May to reach an annualised pace of 1.03m, against expectations of a 1.1m reading.

However, the number of building permits leapt by 11.8% over the month in May to hit 1.27m, while April´s figure for starts was revised to 1.16m units, versus a preliminary estimate of 1.13m.

In company news, Alibaba slipped 0.38% after reports the Chinese e-commerce giant was considering a $500m investment in Snapdeal.com with iPhone assembler Foxconn Technology.

Clothing retailer Gap lost 0.03% after saying late on Monday that it intends to shut 140 stores in North America by the end of the year.