US open: Stocks edge higher ahead of Fed
Wall Street was edging slightly higher as worries about North Korea receded with investors looking ahead to the latest policy announcement from the Federal Reserve on Wednesday.
At 1448 BST, the Dow Jones Industrials Average was up by 0.27% or 61.85 points at 22,331, while the S&P 500 was adding 0.28% or 6.98 points to 2,507 with the Nasdaq Composite ahead by 0.37% or 24.16 points to 6,473.
On Friday, US stocks notched further all-time highs, with the S&P 500 closing above 2,500 for the first time.
The Fed will conclude its two-date policy meeting on Wednesday. Although no change is expected to interest rates, the US central bank is expected to start laying the foundations to unwind its $4.5trn balance sheet.
Konstantinos Anthis at ADS Securities said: "The Fed will leave rates unchanged this month but the real interest for investors is whether they will announce their intention to start normalizing their balance sheet by not reinvesting the profits from their bond purchases. Taking this step would count as a policy tightening initiative - as the Fed would reduce the amount of money they spent on asset purchases - and would further highlight their bullish view over the progress of the economy.
"Furthermore investors and speculators will be equally interested to hear what Fed Chairwoman Janet Yellen has to say about the prospect of another rate hike before the year is out. The Fed is maintaining a bullish stance, but the mixed performance of the economy over the past months, the current state of play in the geopolitical arena and the expected toll of the two recent hurricanes might force a more balanced tone. Should the Fed go ahead and announce a balance sheet normalisation the dollar will rally but the extent of the move hinges on any hints about the Fed raising rates in December."
In currency markets, the dollar hit an eight-week high against the yen, trading up 0.55% to 111.44, with investors moving out of the safe-haven Japanese currency as tensions between the US and North Korea eased.
Richard Perry at Hantec Markets said: "As risk appetite shows signs of improvement, the flow out of safe haven assets seems to be continuing on Monday morning. With no increased provocation to speak of on the Korean Peninsula, investors are moving out of gold, the yen and US Treasuries in search for higher yielding, more risky assets. This move means that the technical positions on gold and the yen are on the brink of a significant change in outlook."
In corporate news, Northrop Grumman and Orbital ATK were in the spotlight after the former announced an agreement to buy its rival in a deal valued at around $7.8bn or $9.2bn if debt is included, for a 22% premium.
Teva Pharmaceuticals was also in the news after saying it would sell its women's health assets for $1.38bn in order to reduce its debt pile.
On the data front, the NAHB housing market index for September is due at 1500 BST, followed by the Treasury's report on long-term capital flows in July at 2100 BST.