NEW YORK (AP) -- U.S. stocks were more or less unchanged in midday trading Thursday as investors remained on the sidelines until the Federal Reserve's announcement this afternoon. Policymakers are considering whether or not to raise U.S. interest rates for the first time in nearly a decade.
KEEPING SCORE: The Dow Jones industrial average was up seven points to 16,748 as of 12:05 p.m. Eastern. The Standard & Poor's 500 index was up a point to 1,996 and the Nasdaq composite edged up 10 points, or 0.2 percent, to 4,899.
THE FED IN FOCUS: Two months ago, it seemed almost certain that the Fed would begin a cycle of rate increases in September. Now, after a summer of turmoil in financial markets and concerns about China's economy, there are more investors who believe the Fed will wait until December.
The Fed started its two-day policy meeting Wednesday and will announce its decision this afternoon. Interest rates have been near zero since 2008 in response to the financial crisis and Great Recession. The last time the central bank actually raised rates was 2006.
IF THEY DO: If the Fed raises interest rates, it would likely have an immediate negative impact on stocks. A Fed interest rate hike would be a surprise, as securities that bet on which way the Fed will move rates have shown roughly a 30 percent chance of an interest rate increase.
It would also challenge the assumption investors have been making in the last six weeks: that the recent economic turmoil in China and low inflation numbers in the U.S. do not provide a good setting for Fed policymakers to raise rates.
The Fed's low interest rate policy was designed to encourage lending, but it had a secondary effect of helping drive a seven-year bull market in stocks. By keeping interest rates low, it made bonds, CDs and other interest-bearing investments less attractive, and drove investors to put money into the stock market. A rising interest rate environment could send that process into reverse.
IF THEY DON'T: If the Fed keeps interest rates near zero, the chances of them raising interest rates this year would appear to drop. There are only two more meetings this year for Federal Reserve policymakers, in October and December.
Low rates would continue to make interest-bearing investments less appealing, helping to drive money intostocks. Low borrowing costs also encourage companies to borrow money to buy back their own stock, which also tends to send stock prices higher.
If the Fed doesn't raise rates, on the other hand, that could also signal to investors that policymakers are not as confident in the U.S. economy as they were over the summer.
"The equity market may think, 'What does Yellen know that we don't?'" John Briggs, head of bond market strategy for the Americas at RBS, wrote to clients in a report.
EUROPE: Global markets stood pat as investors waited for the Fed's decision. Germany's DAX index closed up only slightly, France's CAC-40 rose 0.2 percent and the U.K.'s FTSE 100 lost 0.7 percent.
PAY-PER-VIEW: Cablevision, a New York-area cable TV provider, jumped $4.32, or 15 percent, to $32.85 after agreeing to be bought by the European cable company Altice. The merger would create the fourth-largest cable company in the U.S.
DIAL TONE: Verizon slumped $1.27, or 3 percent, to $44.92 after the communications company said its earnings may be flat this upcoming year.
ENERGY: U.S. benchmark crude edged down 51 cents to $46.64 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils, fell $1.04 to $49.48 per barrel in London. Oil prices had surged the day before.
BONDS AND CURRENCIES: U.S. government bond prices rose slightly. The yield on the 10-year Treasury note fell to 2.29 percent. The euro rose 0.1 percent to $1.1297 and the dollar rose 0.3 percent to $120.89 yen.