Stocks struggle ahead of Fed

NEW YORK (CNNMoney.com) -- Stocks wobbled Wednesday afternoon as investors showed caution ahead of the Federal Reserve's latest comments on the economy and interest rates.

Upbeat earnings from Oracle and Morgan Stanley helped sentiment, but couldn't stir a market eager to hear from the central bank.

The Nasdaq (up 1.47 to 2,409.68, Charts) composite and the broader S&P 500 (up 0.90 to 1,411.84, Charts) index were both little changed around 3 hours into the session. The Dow Jones industrial average (down 15.14 to 12,272.96, Charts) lost a few points.

Fed policy makers, currently meeting, are expected to hold a key short-term interest rate steady at 5.25 percent for the sixth time in a row. A decision is expected at around 2:15 p.m. ET.

As always, investors will be attuned to what the statement says about the outlook for the economy and interest rates. In addition, investors will be looking to see if the Fed bankers address the recent fallout in subprime mortgage lenders. (Full story)

Stocks rose for the second straight session Tuesday after an encouraging housing sector report soothed some worries about the health of the economy, as the two-day Fed meeting got underway.

Treasury prices slipped ahead of the Fed announcement, raising the yield on the 10-year note to about 4.57 percent from 4.54 percent late Tuesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar rose versus the euro and the yen.

Among stock movers, Morgan Stanley (up $3.16 to $79.27, Charts) shares jumped after the bank reported higher earnings that topped estimates.

Oracle (up $0.44 to $17.99, Charts) shares also climbed after the software maker posted quarterly sales and earnings that rose from a year ago. Earnings were released after the close Tuesday.

Also after the close Tuesday, Adobe Systems (up $1.84 to $42.58, Charts) reported higher profits that topped estimates on lower sales that missed forecasts. The stock gained Wednesday morning.

Wednesday morning, FedEx (down $2.33 to $109.96, Charts) reported lower quarterly earnings that topped estimates and issued a 2007 forecast that is short of expectations. Shares slipped. (Full story)

SanDisk (up $1.47 to $43.38, Charts) rose after the flash memory chip maker reached a patent agreement with South Korea's Hynix Semiconductor.

On the downside, U.S. Auto Parts Network slumped 44 percent in unusually active trading after reporting a fourth-quarter net loss late Tuesday, down from a profit a year ago. The auto parts retailer also issued a first-quarter and full-year 2007 earnings outlook that is short of forecasts.

Market breadth was positive and volume was moderate. On the New York Stock Exchange, winners topped losers 9 to 7 on volume of 570 million shares. On the Nasdaq, advancers narrowly edged decliners on volume of 850 million shares.

U.S. light crude oil for May delivery fell 10 cents to $59.50 a barrel on the New York Mercantile Exchange, following the release of the weekly oil inventories report.

COMEX gold for May delivery rose $1 to $660 an ounce.

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