US open: Stocks go green ahead of latest Fed policy announcement

Wall Street trading began with some gains on Wednesday ahead of the Federal Reserve's latest policy announcement.

At 1510 GMT, the Dow Jones Industrial was 0.69% higher at 23,838.81, while the S&P 500 had picked up 0.74% to 2,564.92 and the Nasdaq Composite traded 1.28% firmer at 6,840.82.

Wall Street finished with some small wins on Tuesday after a session of heavy losses the day before.

However, Oanda analyst Craig Erlam warned that sentiment remained "extremely fragile" as 2018 winds to a close, with investors hoping the Fed will bring an end to the sell-off that its chairman started almost three months ago.

"While it is harsh to place the blame for the market turbulence solely on Jerome Powell, it was clearly the straw that broke the camel’s back and there is a hope that a dovish announcement today could go some way to undoing the damage of the last few months," said Erlam.

"A dovish hike is widely expected today and increases next year reduced to one or two, although I wonder whether they may hold off and surprise the markets. I may not agree with Trump’s constant Fed bashing but he may have a point on this occasion. With the global economy facing lower growth in 2019, including the US, inflation in check and US stocks in correction territory, it may not be the best time to be raising rates."

In other news, West Texas Intermediate was 1.25% higher at $46.82 a barrel and Brent Crude was fetching $56.71 per barrel, a 0.80% increase, and the USD had slipped 0.16% against the GBP to 0.7899 as of 1500 GMT.

In corporate news, General Mills shot up 7.36% in early trade as the Cheerios owner's second-quarter profit beat analysts' expectations.

3M inched forward 0.36% after it agreed to buy the technology business of healthcare technology provider M*Modal for an enterprise value of $1bn.

Pfizer was up 0.75% at the bell as it agreed to merge its consumer healthcare unit with that of London-listed GlaxoSmithKline.

Eli Lilly picked up 3.19% at the open after the drug maker said 2019 revenue and profit would be ahead of analysts' expectations.

While the Fed announcement was scheduled for 1900 GMT, but elsewhere on the data front, US existing home sales increased 1.9% last month from a seasonally adjusted rate of 5.32m in October, according to the National Association of Realtors.

Lawrence Yun, the NAR’s chief economist, said: "The market conditions in November were mixed, with good signs of stabilizing home sales compared to recent months, though down significantly from one year ago. Rising inventory is clearly taming home price appreciation."

The median existing-home price for all housing types rose 4.2% year-on-year in November to $257,700.

Elsewhere, the US current account deficit widened to $124.8bn in the third quarter from a revised $101.2bn for Q2 as imports surged in the third quarter.

The deficit was 2.4% of current GDP in the third quarter, up from the 2% recorded for the previous three-month period, according to the Bureau of Economic Analysis.