NEW YORK (Reuters) ? Stocks drifted lower on Wednesday as investors were reluctant to place bets ahead of a U.S. Federal Reserve announcement that is expected to present some action to speed up a lagging recovery.
The Fed is widely anticipated to announce plans to shift its portfolio in favor of longer-dated bonds, pushing long-term interest rates -- already near historic lows -- even lower in a move known as Operation Twist. A Fed statement is expected at 2:15 p.m. EDT (1815 GMT)
The move, intended to flatten or "twist" the yield curve, is one step by the Fed that investors say has already been priced into the market, but other stimulus measures may also come.
"People are unsure of how to position themselves ahead of the announcement. There are a lot of expectations," said Mark Bayko, portfolio advisor for U.S. and international equities at RBC Dominion Securities in Toronto.
"There are other options available to them. The one that investors seem to be talking about and expecting to some degree today is that the Federal Reserve may also announce that they're lowering the rate of interest they pay to banks that store excess reserves at the Federal Reserve," he added, noting that would force banks to look for returns elsewhere.
He said the market will be disappointed if the Fed only rebalances its portfolio.
The Dow Jones industrial average (.DJI) was down 35.01 points, or 0.31 percent, at 11,373.65. The Standard & Poor's 500 Index (.SPX) was down 3.75 points, or 0.31 percent, at 1,198.34. The Nasdaq Composite Index (.IXIC) was up 10.86 points, or 0.42 percent, at 2,601.10.
Nine of the 10 sectors in the S&P 500 were lower, while technology shares gained, boosted by positive earnings and outlooks from software makers Oracle Corp (ORCL.O) and Adobe Systems Inc (ADBE.O) late Tuesday.
Oracle surged 7.1 percent to $30.37 a day after forecasting higher-than-expected current-quarter earnings as well as robust sales, hitting a near 8-week high earlier in the session.
Adobe advanced 3.1 percent to $25.41 after forecasting fourth-quarter sales above estimates.
Other perceived safe-havens in the group -- Apple Inc (AAPL.O) and International Business Machines Corp (IBM.N) -- were also up. Apple put on 1.4 percent to $419, while IBM added 1 percent to $176.50.
In the latest economic data, existing home sales rose more than expected in August to the fastest annual pace since March, helped by falling prices and low interest rates, the National Association of Realtors said.
(Reporting by Claire Sibonney; editing by Jeffrey Benkoe)
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