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Stock Tread Water Ahead of Fed Meeting

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Stock Tread Water Ahead of Fed Meeting

Stocks started the trading session in the black moving higher as positive sentiment returned briefly. Investors are concerned about the Fed meeting next week and a potential tapering of the bond purchase program. There seems to be two camps, those who believe that economic strength will erode market sentiment and those who believe that strength will be beneficial to stocks in 2014.

Government involvement in the markets continues to play a role which was evident on Friday. Anadarko faces a bill of up to $14 billion over Tronox spin-off. Anadarko Petroleum (NYSE:APC) shares plummeted 12% on the open after Manhattan Bankruptcy judge Allan Gropper ruled that the company would have to pay $5-14 billion in environmental cleanup and health claims. The case relates to the 2005 spin-off by Kerr-McGee now a unit of Anadarko of its chemicals business and old environmental liabilities as Tronox, which fell into bankruptcy in 2009 because of those debts.

The House approved a two-year budget program that will remove the threat of a shutdown and a potential debt ceiling debate during the period. John Boehner noted that the measure amounted to a small step toward the GOP’s goal of deficit reduction. The deal now goes to the Senate, which is expected to authorize the legislation next week.

Inflation in the US remains subdued according to the Labor Department. According to the BLS the producer-price index fell 0.1% in November, after a 0.2% drop in October and a 0.1% fall in September. Prices last fell for three months in a row at the end of 2012. Meanwhile, the core producer-price index, which excludes food and energy, increased 0.1%. Wholesale energy prices declined 0.4% in November after a 1.5% drop in October. Food prices were flat in November after a 0.8% gain in the prior month.

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