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U.S. stocks were little changed as speculation Europe will act to tame its debt crisis overshadowed a slump in FedEx Corp. and disappointing economic reports.
The S&P 500 (SPX) rose less than 0.1 percent to 1,405.31 at 9:35 a.m. in New York. The gauge lost 0.1 percent yesterday.
Equity futures erased earlier losses after two central bank officials briefed on the plan said European Central Bank President Mario Draghi’s bond-buying proposal involves unlimited purchases of government debt that will be sterilized to assuage concerns about printing money. To sterilize the bond purchases, the ECB will remove from the system elsewhere the same amount of money it spends, ensuring the program has a neutral impact on the money supply.
Draghi told the European Parliament this week that the ECB needs to intervene in bond markets to wrest back control of interest rates in the fragmented euro-area economy and ensure the survival of the common currency. Policy makers will start deliberating on the plan later today and Draghi will announce whether it has been agreed to at a press conference tomorrow.
Stocks slumped earlier as London-based Markit Economics said euro-area services and manufacturing contracted more than initially estimated in August. Separate data showed service industries in China expanded at a weaker pace in August as new orders slowed and Australia’s economy slowed more in the second quarter than economists expected.
FedEx (FDX), a barometer for the economy because it delivers goods from mobile phones to pharmaceuticals, slid 2.1 percent after projecting its first decline in quarterly earnings in almost three years. The company said profit for the quarter that ended Aug. 31 will range from $1.37 to $1.43 a share. That was less than its June 19 forecast of $1.45 to $1.60 a share and year-earlier earnings of $1.46.
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