US open: Stocks still trading mixed ahead of expected Fed tapering announcement

Stocks are trading mixed ahead of the Federal Reserve's policy announcement and despite the release of better-than-expected readings for private sector payroll growth and services sector activity.

Nevertheless, the day before all of Wall Street's major stock market indices notched up fresh record highs with the Dow Jones Industrial topping the 36,000 point mark for the first time.

That, said Jeffrey Halley, senior market analyst at Oanda, betrayed no pre-FOMC nerves as corporate earnings continued to impress.

As of 1604 GMT, the Dow Jones Industrials was drifting lower by 0.2% to 35,982.29, alongside a 0.8% dip on the S&P 500 to 4,626.89, although the Nasdaq Composite was 0.16% higher to 15,673.56.

West Texas Intermediate crude oil futures were sharply lower, but the US dollar index was hugging the flatline while 10-year US Treasury note yields were higher.

Avis shares were giving back a little bit of ground but only after what Halley said had been an "unexpectedly impressive" set of results overnight triggered the "mother of all short squeezes" and saw the car rental outfit's shares more than double in value.

Fully 21% of the company's free float had been lent out to short-sellers prior to its results release.

Halley also pointed out Avis CEO's use of the magic 'word' EV, which in his view had "also attracted the Elon Musk meme-disciples from their Reddit burrows."

Bed, Bath & Beyond shares were also in focus, shooting 17% higher on the back of its results, which the company had also released after Tuesday's close.

On the economic side of things, consultancy ADP reported a 571,000 jump in private sector jobs during the month of October (consensus: 400,000), a possible good omen ahead of Friday's non-farm payrolls figures.

The Institute for Supply Management's services sector Purchasing Managers' Index surprised to the upside, posting a record reading of 66.7, which was up from September's print of 61;9 (consensus: 61.8).

he latest MBA data revealed a 9.2% month-on-month drop in total mortgage applications in October, as the 30-year mortgage rate hit an eight-month high of 3.22%.

The Fed's policy announcement was due out at 1800 GMT with policymakers expected to announce that they would reduce the monthly pace of debt repurchases by $15bn.