Stocks Struggle for Direction

By Brendan Conway

NEW YORK—U.S. stocks were mixed midsession as investors awaited the Federal Reserve’s decision on monetary policy and Fed Chairman Ben Bernanke’s first news conference.

The Dow Jones Industrial Average gained 20 points, or 0.2%, to 12616 by around noon, a day after hitting a fresh three-year high. The Standard & Poor’s 500-stock index shed a fraction to 1346 as materials and energy stocks sank. The Nasdaq Composite inched a fraction higher to 2848.

Many investors expect a somewhat more hawkish tone from the Fed’s policy statement, which is scheduled for release at 12:30 p.m. Eastern time, and from Mr. Bernanke, who is slated to brief the press at 2:15 p.m. Among key items, the Fed is expected to affirm its decision to end the bond-buying program known as quantitative easing on schedule, at the end of June.

“I don’t expect there to be a QE3, but that doesn’t mean that the Fed will stop liquidity in the markets,” Paul Dietrich, chief executive officer of Foxhall Capital Management said. “[Quantitative easing] is going to come to an end but they’re also not going to drain out the almost $2 trillion they put into the economy and they’re not going to raise rates. That’s why you’re not seeing big movements in the markets.”

In deal news, Johnson & Johnson shed 0.8% after the company said it was buying Swiss medical-device maker Synthes for $21.3 billion in cash and stock. CenturyLink shed 0.7% after pushing further into cloud computing with an agreement to buy Savvis for $2.5 billion. Savvis’ stock rose 9%.

Among companies reporting earnings, a jump in first-quarter profit at ratings firm Moody’s helped the company beat analyst expectations handily. Shares gained 7.1%.

Corning rose 2.2% after the company’s sales increased more than analysts had expected, and first-quarter earnings dropped less than anticipated.

Ericsson’s U.S.-listed shares jumped 11% after the world’s largest maker of network equipment posted stronger-than-expected gains in sales and profits.

In economic data, stocks got some support from a broad-based surge in U.S. durable-goods orders during March, signaling economic strength in the face of rising oil prices.

Write to Brendan Conway at brendan.conway@dowjones.com