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New York - Global stocks mostly treaded water on Tuesday ahead of announcements by US and Japanese central banks this week that are expected to extend the loose monetary policies that have supported markets.
The Federal Reserve is widely expected to keep interest rates unchanged at the end of its two day meeting on Wednesday. But its policy statement hint at whether investors can expect higher US interest rates later this year in light of better economic data.
The Bank of Japan's policy meeting ends Friday, and analysts are expecting some sign of new stimulus measures.
"The market is in a waiting mode ahead of the Fed," said Xavier de Villepion, equity salesman at HPC in Paris.
Among major bourses, the S&P 500 was essentially flat, while Paris edged up 0.2% and London dipped 0.2%.
Frankfurt gained 0.5% and Tokyo tumbled 1.4% as the yen pushed higher against the dollar on speculation that upcoming stimulus measures won't be as generous as previously thought.
"The Japanese yen has made a sharp reversal the past 24 hours as investors have succumbed to reality: hopes for a major, 'fix all' set of stimulus measures won't be coming down the pipeline," said Christopher Vecchio, analyst at DailyFX.
The lofty yen hit exporters like Toyota and factory robot maker Fanuc, which lost 2.5% and 1.3%, respectively.
McDonald's shed 4.5% as it reported a 9.1% drop in second-quarter earnings $1.09bn, due to a $230m charge from refranchising operations and tepid growth across its markets.
Caterpillar, another component of the prestigious Dow index in the US, jumped 5.2% after signalling it would cut more jobs in response to the sustained downturn in investment by oil and mining companies.
British oil company BP declined 1.3% after it posted a second-quarter loss of $1.4bn, with the costs of the 2010 Gulf of Mexico oil spill disaster still weighing on the company in addition to sagging oil prices.
The energy major had already revealed earlier this month that the final cost for the spill stood at $61.6bn, including the latest second-quarter hit.
