U.S. Stocks Are Little Changed After Federal Budget Deal

Posted by Bloomberg

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U.S. stocks were little changed, with the Standard & Poor’s 500 Index near a record, as investors considered whether a Congressional budget accord will prompt theFederal Reserve to pare back stimulus.

The S&P 500 (SPX) gained less than 1 point to 1,802.82 at 9:30 a.m. in New York.

“The hurdle of the budget deal has been passed and it will affect the Fed’s decision to taper in the coming months as that uncertainty has subsided,” Chad Morganlander, a Florham Park, New Jersey-based fund manager at Stifel Nicolaus & Co., which oversees about $150 billion of assets, said by phone. “Today’s trade and in the coming weeks will be all about Federal Reserve positioning and when and how large their taper will be.”

The S&P 500 fell 0.3 percent yesterday after reaching a record 1,808.37 the day before. Fed stimulus has helped propel the benchmark gauge higher by more than 166 percent from its bear-market low in 2009. The index has rallied 26 percent this year and is challenging 2003 for the biggest annual jump since 1998.

Investors are considering when the central bank, which meets next week, may reduce the pace of its monthly bond buying. Fed officials cited the drag from fiscal policy in their Oct. 30 statement and Jeffrey Lacker, president of the Richmond Fed, said in a speech Dec. 9 that budget uncertainty is weighing on business investment decisions.

To read about the Budget Deal Go HERE