North American stocks were down slightly in midday trading on Wednesday, ahead of the Federal Reserve's monetary policy statement which is expected to be released at 12:30 (ET).
At noon, the Dow Jones industrial average was down 17 points or 0.1 per cent, to 12,820. The broader S&P 500 was down 3 points or 0.2 per cent, to 1355. In Canada, the S&P/TSX composite index was down 49 points or 0.4 per cent, to 11,739.
In Europe, major indexes closed higher. The U.K.'s FTSE 100 rose 0.6 per cent and Germany's DAX index rose 0.5 per cent.
While Spain's skyrocketing borrowing costs have been dominating headlines – and fears – earlier in the week, the news was upbeat on Wednesday: Spain's bond prices rebounded, sending yields down from their euro-era record highs on Monday.
The yield on the 10-year government bond fell to 6.7 per cent, down 29 basis points (there are 100 basis points in a percentage point). That's still shockingly high and considered unsustainable over the longer term, but at least the yield is headed in the right direction. The yield on Italy's 10-year government bond also fell, to 5.74 per cent, down 15 basis points.
However, the market seems to be biding its time until the Fed delivers its much-anticipated policy statement, followed by chairman Ben Bernanke's press conference in the afternoon. If recent gains in stocks are any indication, expectations are high that the recent bout of weak economic news will drive the Fed into taking some sort of stimulative action. While outright quantitative easing – or printing money to buy bonds – seems like a long-shot, observers believe the Fed could announce a variation that entails buying longer-term bonds and selling shorter-term bonds.
Within the S&P 500, technology stocks were the strongest area, rising 0.2 per cent. Consumer staples fell 0.8 per cent after Procter & Gamble cut its earnings and revenue forecasts for the second time in three months. Utilities fell 0.6 per cent and industrials fell 0.4 per cent.
Within Canada's benchmark index, technology stocks fell 2 per cent after Research In Motion Ltd confirmed that it is implementing layoffs to save money. Materials fell 1.4 per cent after the price of gold slumped to $1,608 (U.S.) an ounce, down $15. Energy stocks fell 0.5 per cent after the price of crude oil fell to $82.42 a barrel, down $1.61.