MARKET SNAPSHOT: U.S. Stocks Slip Ahead Of Fed Decision

By Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks drifted lower erasing modest opening gains amid a slew of economic data and as the Fed begins two-day deliberations to decide whether to slow down the pace of the stimulus program.

Dow (DJI) shed 4 points to 15,880.33. The S&P 500 (SPX) index slipped 4 points or 0.2% to 1,782.37, while Nasdaq Composite (RIXF) was down 10 points or 0.2% to 4,019.45.

Main indexes rose during the previous session buoyed by positive economic data showing improving business activity across the country.

Investors digested a slew of economic data to assess how and when the Fed will decide to begin reducing its $85 billion a month stimulus program, which added more than a $1 trillion to its balance sheet over the past year. The Fed is expected to announce its decision on Wednesday afternoon.

Prices of consumer goods did not change from the previous months, leaving the inflation rate on the annualized base at 1.2%, still below the Fed target, making its decision to start the taper sooner rather than later more difficult. The U.S. current-account deficit narrowed to $94.8 billion in the third quarter, marking the lowest level since Fall 2009, the government said Tuesday.

In corporate news, shares of Facebook Inc. (FB) rose 2% after The Wall Street Journal reported the social network will begin selling video advertisements later this week.

Shares in Frontier Communications Corporation (FTR) jumped 8.4% after it announced a deal to buy AT&T's wireline residential and business services and associated assets in Connecticut in an all-cash transaction.

Boeing Co. (BA) shares rose 1.7% after the company said late Monday it would boost its quarterly dividend by 50% and its board approved $10 billion to repurchase outstanding shares, which will be added to what's left of a 2007 buyback plan.

Shares of KKR Financial Holdings (KFN) jumped 24% after a late-Monday announcement that KKR & Co. (KKR.AE) would acquire it for $2.6 billion in an all-stock deal. Shares of KKR & Co. dropped 5%.

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