Stock Market Today: Stocks Slip Ahead of Fed Policy Announcement

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NEW YORK ( TheStreet) -- Major U.S. stock markets were slipping on Wednesday as positive sentiment gave way to nerves ahead of the Federal Reserve's policy announcement.

The Dow Jones Industrial Average was dropping 0.33% to 16,855.68. The S&P 500 was sliding 0.15% to 1,967.09. The Nasdaq was advancing 0.31% to 4,456.61, as Twitter shares engaged in a post-earnings rally. U.S. stocks on Tuesday were dragged down by concerns over sanctions against Russia for its role in the Ukrainian conflict and hurt by uncertainty over the Fed meeting which concludes today.

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"Dips continue to be buying, not selling opportunities," Craig Johnson, technical market strategist at Piper Jaffray, wrote in a note. He expects that the rotation toward large-cap stocks will likely continue for a while longer, while noting that the S&P 500 has on average continued to rise after such periods of large-cap outperformance. "At this juncture, the broader market remains in a well-defined uptrend," he added. "With the economy gradually healing, we suspect the market should continue to grind higher over the near-to-intermediate-term and we reiterate our call for 2,000 on the SPX and our year-end 2014 price objective of 2,100."

Twitter shares were surging 21.5% to $46.87 after the company showed that it was able to accelerate user growth in the second quarter. The social media copmany earned 2 cents a share on a non-GAAP basis on $312 million in revenue. Analysts polled by Thomson Reuters had expected Twitter to lose a penny a share on $283.07 million in revenue.

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U.S. second-quarter advanced GDP figures came in a stronger than expected, increasing at an annual rate of 4% vs. the consensus estimate of 3%. The first quarter's GDP result was upwardly revised to a decrease of 2.1%, from the prior estimate of 2.9%, the Commerce Department reported Wednesday.

The July FOMC rate decision will be out at 2 p.m. EDT. Societe Generale economists say that aside from another $10 billion reduction in the pace of asset purchases, there aren't likely to be any substantive changes in the FOMC statement. Any shift in the Fed's rhetoric will come no sooner than the September 16 to 17 FOMC meeting, and possibly even later. The "Fed's unlikely to break the summertime bliss," the economists noted.

The July ADP employment change report, also out before the bell and preceding Friday's July government job results, showed private payroll growth of 218,000, which supports the view that job growth is maintaining strength heading into the second half of the year.

Other stocks to watch Wednesday include Amazon , AstraZeneca , Amgen and Honda . Japanese carmaker Honda announced that it had set an all-time monthly record for auto production in Asia. Bio-pharmaceutical company Amgen is cutting 15% of its U.S. workforce and will close two manufacturing plants in Washington and Colorado. British pharmaceutical company AstraZeneca announced a deal to pay $2.1 billion for Spanish drugmaker Almirall's respiratory drug line. Amazon is investing $2 billion in its India operation to push back against Flipkart.