US open: Stocks gain ahead of policy announcements from FOMC and BoJ

US stocks rose on Tuesday as investors looked ahead to interest rate announcements from the Bank of Japan and the Federal Reserve.

At 1513 BST the Dow Jones Industrial Average edged up 0.41% to 18,194.16 points, the S&P 500 increased 0.39% to 2,147.29 points and the Nasdaq grew 0.34% to 5,252.91 points.

At the same time oil prices fell ahead of data from the American Petroleum Institute on weekly crude stocks at 2030 BST. Analysts polled by Reuters expect US commercial crude oil inventories rose 2.3 million barrels in the week to 16 September, adding to concerns about the global supply glut.

West Texas Intermediate crude dropped 0.710% to $43.55 per barrel and Brent declined 0.90% to $45.54 per barrel.

Meanwhile, investors are awaiting Wednesday’s policy decisions from the Federal Open Market Committee and the BoJ. The US central bank is widely expected to keep interest rates unchanged while BoJ officials have suggested in recent weeks that there is room to cut rates further after taking them into negative territory for the first time earlier this year.

“While the FOMC is typically the most keenly followed central bank in the world, they risk being overshadowed tomorrow owing to the uncertainty and range of options open to the BoJ,” said Joshua Mahony, market analyst at IG.

“The decreasing liquidity available to the BoJ, coupled with the existence of negative rates means that Kuroda has little room for manoeuvre. With speculation that the BoJ will seek to steepen the yield curve by focusing more on the short term bonds, and rumours that we could see the bank focus on deeper negative rates at the expense of QE, the market uncertainty means we could see significant volatility ahead of tomorrow’s open.”

In economic data, the Commerce Department revealed US housing starts declined 5.8% from July’s revised 1.21m to 1.14m, missing expectations for a smaller drop to 1.19m. Starts were up 0.9% from the same month a year ago.

In corporate news, Lennar shares declined as the house builder reported better-than-expected quarterly results but revealed its margins on home sales fell.

Hospitals operator Community Health Systems slumped on news it is exploring a possible sale.

FedEx rallied after announcing plans to raise shipping rates next year.

SeaWorld Entertainment was under the cosh after saying it will suspend its quarterly dividend.

Ascena Retail Group Inc. tumbled after the owner of Ann Taylor stores reported fourth-quarter results late Monday that missed forecasts.