MARKET SNAPSHOT: U.S. Stocks Slump As Market Awaits Fed Policy Statement

By Barbara Kollmeyer and Anora Mahmudova, MarketWatch

Crude prices sharply lower after unwelcome supply surprise

NEW YORK (MarketWatch) -- U.S. stocks drifted lower ahead of the FOMC decision on Wednesday afternoon as investors grew nervous about whether the Fed will strike the right balance in the statement by removing the word 'patient' and paving the way for its first rate hike in nearly a decade.

The S&P 500 (SPX) inched lower with seven of its 10 main sectors trading lower, led by consumer staples, consumer discretionary and industrials. Utilities, energy and telecom-related shares, all considered less rate sensitive, were performing the best.

The Dow Jones Industrial Average (DJI) was down more than 70 points, after shedding more than 100 points near the open. About two-thirds of the Dow's 30 components were trading lower with Visa Inc. (V) among the big losers.

The Nasdaq Composite (RIXF) also declined.

"The sole aim today will be to move to a more data-dependent stance without appearing to commit to a June rate hike," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor, in a note.

Read: How markets may react to Fed's lack of patience (http://www.marketwatch.com/story/how-markets-may-react-to-feds-lack-of-patience-2015-03-17)

Bob Baur, chief global economist at Principal Global Investors, said the Fed wants to maintain the most flexibility as it attempts to lift rates.

The Fed "want some flexibility to be able to raise rates fairly soon," Baur noted "But they don't want to be locked in," to a specific timetable, the Principal economist added.

The bulk of the news will come at 2 p.m. Eastern Time, when a six-paragraph policy statement is released, along with revamped economic forecasts and the "dot plot" path of interest rates from the 17 central bankers. Fed Chairwoman Janet Yellen will speak at a news conference at 2:30 p.m. More details on that here (http://www.marketwatch.com/story/heres-what-to-watch-from-the-fed-this-week-2015-03-16).

(http://www.marketwatch.com/story/heres-what-to-watch-from-the-fed-this-week-2015-03-16)The smart money and the Fed: Stan Shamu, market strategist at IG, said in a note that many feel that Yellen will get it "absolutely right." And he said the smart money will be looking to react to the results rather than trying to get ahead of the central bank's moves.

"The simple reasoning is that the move isn't likely to be a mere flash in the pan and there will be plenty to digest from the meeting and news conference. As a result there will be ample time for traders to initiate positions once all the facts are on the table," said Shamu in a note.

For two officials, a 'Field of Dreams' moment on FOMC (http://www.marketwatch.com/story/for-two-officials-a-field-of-dreams-moment-on-fomc-2015-03-17)

Stocks to Watch: Oracle Corp.(ORCL) shares jumped after the company posted flat earnings, but hiked its dividend (http://www.marketwatch.com/story/oracle-adobe-burlington-stores-earnings-in-focus-2015-03-17).

Adobe Systems Inc.(ADBE) shares slumped after the company said subscriber growth badly missed expectations.

Quiksilver Inc.(ZQK) jumped 9% after the outdoor sports apparel maker reported a narrower-than-expected loss (http://www.marketwatch.com/story/quiksilvers-stock-rallies-after-narrower-than-expected-loss-2015-03-17) late Tuesday.

FedEx Corp.(FDX) shares fell after the company reported a better-than-expected fiscal third-quarter profit (http://www.marketwatch.com/story/fedex-beats-profit-expectations-but-provides-a-downbeat-outlook-2015-03-18) but missed revenue estimates.

Guess Inc.(GES) and Williams-Sonoma Inc.(WSM) also are expected to report quarterly results.

Kraft Foods Group Inc.(KRFT) shares fell after the company has recalled 242,000 cases of Kraft Macaroni & Cheese Dinner boxes (http://www.marketwatch.com/story/kraft-recalls-242000-cases-of-mac-cheese-dinners-2015-03-18), saying specific products could contain small metal pieces.

Read more about stock action in the Movers & Shakers column (http://www.marketwatch.com/story/fedex-general-mills-williams-sonoma-earnings-in-focus-2015-03-18).

Other markets: European stocks reversed earlier losses and moved higher. The dollar (DXY) as well, was stuck in ranges and gold was slightly lower, while U.S. crude prices were piling on losses (http://www.marketwatch.com/storyno-meta-for-guid) after the American Petroleum Institute late Tuesday posted a much sharper-than-expected rise in crude supplies than expected (http://www.marketwatch.com/story/api-data-show-105-mln-barrel-rise-in-us-crude-supply-2015-03-17). April crude (CLJ5) was last down about $1.34 to $42.12 a barrel.

(ESM5)In Asia, the Shanghai Composite (http://www.marketwatch.com/story/asian-shares-mixed-china-gains-on-stimulus-hopes-2015-03-18) rallied 2.1% to a near seven-year high.

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