Overnight Markets: Wall Street closes flat ahead of Fed meeting

Wall Street closed flat on Monday after speculation the Federal Reserve will pump cash into the economy and growth in Chinese and the US manufacturing overshadowed a report that JPMorgan Chase was being investigated for mortgage deals.

The Dow Jones industrial average was up six points, or 0.06%, at 11,125. The Standard & Poor's 500 Index was up one point, or 0.09%, at 1,184. The Nasdaq Composite Index was down two points, or 0.1%, at 2,505.

JPMorgan declined 0.6% after it was reported that the Securities and Exchange Commission was investigating whether the Wall Street giant improperly permitted hedge fund Magnetar Capital to choose the loans backing a $1.1 billion mortgage bond in 2007. Investors were also reluctant to make big bets before Tuesday and Wednesday’s meeting of the Fed’s open market committee. They expected gains to the Republicans in the midterm elections on Tuesday.

However, unexpected expansion in the US factory activity in October and increase in construction spending in September helped improve investors’ mood. Other data showed manufacturing in China grew at the fastest pace in six months in October.

Oil service stocks gained after Baker Hughes reported a third-quarter profit that beat expectations. The stock gained 5.2%. Caterpillar rose 0.9% while Exxon Mobil climbed 0.7%. According to traders, the energy sector could flourish after Republican gains as there will be less possibility of increased regulation.

M&T Bank climbed 4.5% after news it would buy Wilmington Trust Corp in a deal worth $351 million. Shares of Wilmington declined 42.5%.

In current trading, Asian markets were down on Tuesday, led by Japanese exporters, as the yen traded near a 15-year high ahead of policy meetings by the Fed and Bank of Japan.

The MSCI Asia Pacific Index was little changed at 130.27 as of 9:44 a.m. in Tokyo. Japan’s Nikkie was down 0.1% at 9,145. Australia’s ASX All Ordinaries Index was trading 0.1% lower at 4,767. Korea’s KOSPI Index was down 0.3%, while Shanghai Composite Index shed 0.2% at 3,047.

In corporate news, Elpida Memory and Honda Motor sank at least 2.1% in Tokyo in response to a stronger yen. Newcrest Mining fell 1.5% in Sydney, while Goodman Fielder climbed 4%.