Russell 2000 drops on rate worries

The Russell 2000 (NYSE: IWM) opened in the red on concerns that the U.S. Federal Reserve may not move to lower interest rates.

At 10:45 a.m. ET, the small-cap index was down 1.76 points, or 0.21%, to 819.96. The Dow Jones Industrial Average (INDU) had lost 44.38 points, or 0.32%, to 13,825.88.

Investors are turning their attention to the U.S. Federal Reserve today, which begins a two-day policy meeting.

On Monday, observers were confident that the Fed will cut its target interest rate up to 0.50%, but today an article in The Wall Street Journal is casting doubt on that expectation, claiming that policy makers will likely either cut the federal funds rate 0.25% or leave it unchanged.

The federal funds rate, the rate at which commercial banks make overnight loans to each other, currently stands at 4.75%, after the Fed voted on Sept. 18 to lower it from 5.25%.

The central bank will announce its decision on Wednesday.

In economic news, U.S. consumer confidence continued to fall in October. The Conference Board reported after the start of trading that its index of consumer confidence fell to 95.6 from 99.5 in September.

For access to the full article, you must be a registered member - it's FREE.

Already a member? Please log in below