Stocks waiting for the Fed

NEW YORK (CNNMoney.com) -- Stocks had trouble finding momentum early Tuesday as investors waited to take cues from the Federal Reserve policy statement due in the afternoon.

The Dow Jones industrial average (Charts), the Standard & Poor's 500 index (Charts) and the Nasdaq composite (Charts) all held close to breakeven after the market open..

The Fed is set to release its last policy statement of the year at 2:15 p.m. ET.

Investors and economists are expecting policymakers to hold rates steady at 5.25 percent for the fourth straight meeting. They'll also be looking for signs about what central bankers plant to do next - cut rates to incite growth or hike rates to keep inflation in check.

In other economic news, the government said before the market open that the U.S. trade deficit narrowed to the smallest gap since August of last year, due mainly to a decline in the price of oil imports.

In corporate news, Dow components Hewlett-Packard (Charts) and Merck (Charts) are both holding their analysts' meeting.

Citigroup (Charts) fell nearly 2 percent after the company failed to announce a major management shakeup.

The financial services giant promoted corporate and investment banking head Robert Druskin to chief operating officer Monday, but CEO Chuck Prince denied speculation that CFO Sallie Krawcheck would leave the bank.

Retailer Best Buy (Charts) reported improved fiscal third-quarter earnings but the results fell short of forecasts. Shares of the electronics chain fell 7 percent.

Sabre Holdings (Charts), owner of online travel site Travelocity, rose 5 percent on reports that it has agreed to be bought by private equity firms.

Harrah's Entertainment (Charts) gained about 1 percent on a report that private equity firms are planning to raise their bid for the gambling giant.

Texas Instruments (Charts), the No. 1 chipmaker for mobile phones, cut its earnings and revenue outlook for the current period after the market close Monday. But shares rose about 1 percent Tuesday.

Nasdaq (Charts) launched a $5.3 billion hostile bid for the London Stock Exchange early Tuesday and will need just over one in five LSE shareholders to accept for it to take control of that exchange. Nasdaq shares jumped about 2 percent. The LSE issued a statement reiterating its rejection of the offer.

Oil prices were slightly higher in electronic trading. U.S. light crude for January delivery gained 33 cents to $61.55 a barrel.

Treasury prices were little changed ahead of the Fed meeting, leaving the yield on the 10-year note near the 4.52 percent level reached late Monday.

The dollar was slightly weaker versus the euro and the yen ahead of the Fed meeting as well.

In global trade, stocks in Asia closed mixed as Japan's Nikkei reached a six-week high. Stocks in Europe were mixed in early trading.

The Fed that cried wolf