* Investors looking for stimulus clarity with Fed meeting
* U.S. budget deal clears crucial vote in Senate
* KFN shares rise after KKR plan to pay $2.6 billion for
* Indexes: Dow flat, S&P down 0.1 pct, Nasdaq flat
By Ryan Vlastelica
NEW YORK, Dec 17 U.S. stocks were flat on
Tuesday, with investors reluctant to make big bets before
results of the latest Federal Reserve policy-setting meeting,
which could give some clarity as to when the central bank will
begin trimming its stimulus.
Major stock indexes briefly extended losses after a two-year
U.S. budget deal cleared a Senate procedural vote that all but
assured its passage by the Senate as early as Wednesday.
The policy-setting Federal Open Market Committee is expected
to issue a statement on Wednesday at the meeting's conclusion.
While it isn't expected to start winding down its purchases of
$85 billion a month in bonds until March, recent
stronger-than-expected economic data seemed to increase the odds
that tapering could occur sooner.
The Fed has said it would begin to slow the program when
certain economic indicators meet its targets, and some market
participants believe the U.S. central bank will upgrade its
economic forecasts in the meeting.
"The most recent data has pulled forward expectations on
when tapering could start," said Hayes Miller, who helps oversee
about $57 billion as head of asset allocation in North America
at Baring Asset Management in Boston.
"We think the Fed will err on the side of caution, but
everyone is taking a wait-and-see attitude."
The CBOE Volatility index VIX, a measure of investor
anxiety, dipped 0.9 percent. Earlier, it rose 2.3 percent to its
highest level since mid-October.
U.S. consumer prices were flat in November, but a bounce
back in the annual inflation rate from a four-year low will
probably give the Fed cover to start the taper. Separate data
showed the U.S. current account deficit was the smallest in four
years in the third quarter as exports increased and more income
was earned abroad.
The Dow Jones industrial average was up 7.19 points,
or 0.05 percent, at 15,891.76. The Standard & Poor's 500 Index
was down 2.12 points, or 0.12 percent, at 1,784.42. The
Nasdaq Composite Index was up 3.91 points, or 0.10
percent, at 4,033.42.
In corporate news, specialty finance company KKR Financial
Holdings rose 27.5 percent to $12.05 a day after KKR &
Co said it would acquire the company for $2.6 billion.
KKR slipped 2.9 percent to $24.36.
Facebook shares rose 1.3 percent to $54.48 after the
Wall Street Journal reported the social network will begin
selling video ads later this week.
Shares of 3M rose 2.6 percent to $131.02 after the
industrial conglomerate affirmed its outlook and raised its
Boeing's board raised the company's dividend about 50
percent on Monday and approved $10 billion in new share buyback
authority that the company said it would use in the next two to
three years. Shares rose 1.8 percent to $137.12.
AT&T said it would sell its wireline operations in
Connecticut to Frontier Communications for $2 billion in
cash, partly to fund the expansion of its 4G network. Frontier
shares jumped 8.5 percent to $4.77 while AT&T shares were down
0.9 percent at $33.84.