At midday: Stocks steady ahead of Fed announcement

North American stocks were in a holding pattern in midday trading on Thursday, ahead of a much-anticipated monetary policy statement from the U.S. Federal Reserve.

At noon, the Dow Jones industrial average was up 21 points or 0.2 per cent, to 13,354. The broader S&P 500 was up 1 point or 0.1 per cent, to 1438. In Canada, the S&P/TSX composite index was down 15 points or 0.1 per cent, to 12,218.

In Europe, the U.K.'s FTSE 100 rose 0.7 per cent but Germany's DAX index fell 0.5 per cent.

The moves follow the U.S. Labor Department's disappointing report on weekly jobless claims. Claims for the period ended last week rose to 382,000, above economists's exectations for 370,000 claims.

But the Fed's policy announcement at 12:30 pm (ET), followed by the release of economic projections and chairman Ben Bernanke's press conference, are likely to be by far the biggest market-moving events of the day. With weak U.S. economic reports – in particular, sluggish employment growth – there are wide expectations for some kind of response from the central bank.

The response could take the form of extending the Fed's commitment to keeping its key interest rate low for a longer period – say, stretching the end date to 2015 from the current 2014.

But many observers believe the Fed could take more drastic action with another round of bond-buying, or quantitative easing.