Financial Markets                      09/17 15:24

   

   NEW YORK (AP) -- U.S. stock indexes remained stuck in place on Tuesday as 
Wall Street made few big moves ahead of what's expected to be the first cut to 
interest rates in more than four years.

   The S&P 500 edged up by 1.49, or less than 0.1%, to 5,634.58. It remains 
0.6% below its all-time closing high set in July, and it briefly rose above 
that mark during the morning.

   The Dow Jones Industrial Average slipped 15.90 points, or less than 0.1%, to 
41,606.18 from its own record set the day before, while the Nasdaq composite 
edged up by 35.93, or 0.2%, to 17,628.06.

   Intel helped drive the market with a gain of 2.7% following a series of 
announcements, including an expansion of its partnership with Amazon Web 
Services to produce custom chips. Intel also detailed plans to build its 
foundry business.

   That helped offset a 2.2% drop for Philip Morris International, which said 
it expects to record a loss of $220 million against its third-quarter results 
because of the sale of its Vectura Group inhaled-therapeutics subsidiary.

   The calm movements for the U.S. stock market overall were a sharp departure 
from prior weeks, during which the S&P 500 briefly fell nearly 10% below its 
all-time high. At the time, global markets were reeling on worries that a 
slowing U.S. economy could fall into a recession, along with some technical 
factors that forced hedge funds around the world to back out of a popular trade 
all at once.

   Since then, excitement has built about an announcement scheduled for 
Wednesday afternoon from the Federal Reserve. The unanimous expectation on Wall 
Street is that the Fed will cut the federal funds rate, which has been sitting 
in a range of 5.25% to 5.50% for more than a year.

   Lower rates would make things easier for the economy, which has already 
begun to slow because it's become so expensive to borrow money for everything 
from houses to cars to corporate debt. The Fed has been keeping its main 
interest rate at a two-decade high in hopes of grinding down on the economy 
enough to stifle high inflation.

   Now that inflation is down substantially from its peak two summers ago, the 
Fed believes it can shift its focus more toward protecting the job market and 
economy. The only question is how much the Fed will cut rates by, and that is a 
delicate balancing act.

   While lowering rates gives a boost to the overall economy and to financial 
markets, it can also give inflation more fuel. Some critics say the Fed is 
already moving too late to help the economy, while others warn of inflation 
staying stubbornly higher than it has in the past.

   The general expectation on Wall Street is for the Fed to deliver a 
larger-than-usual cut of half of a percentage point on Wednesday, according to 
data from CME Group. But it's not a certainty. Traders are still betting on a 
35% probability for a traditional-sized move of a quarter of a percentage point,

   Economic reports released Tuesday did little to change those expectations. 
One said U.S. shoppers spent more at retailers last month than expected. That's 
an encouraging signal indicating strength for the heart of the U.S. economy, 
but details underneath the surface may have been more discouraging. After 
ignoring automobiles and fuel, sales at U.S. retailers last month were a touch 
weaker than economists expected.

   "This data isn't going to decide the issue for the Fed, one way or the 
other," Chris Larkin, managing director, trading and investing, at E-Trade from 
Morgan Stanley, said about the size of Wednesday's rate cut.

   A separate report that came later in the morning said U.S. industrial 
production returned to growth in August and was stronger than economists 
expected.

   In the bond market, the 10-year Treasury yield rose to 3.64% from 3.62% late 
Monday. The two-year yield, which more closely tracks expectations for the 
Fed's actions, rose to 3.59% from 3.56%.

   In stock markets abroad, Japan's Nikkei 225 fell 1% after the value the 
Japanese yen ticked higher against the U.S. dollar.

   The yen has been rising on expectations the Bank of Japan will continue to 
head in the opposite direction of the Federal Reserve and keep raising interest 
rates. A stronger yen can hurt the profits of Japan's big exporters.

   Stock indexes rose modestly across much of Europe, while markets were closed 
in mainland China and South Korea.

   ___

   AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

   ---------

   itemid:a6a27e45f16418e0b024babb3c849161