Data Could Trump FOMC

An Fed Open-Market Committee meeting typically creates more anxiety in the markets than Tuesday's trade would suggest.

Ahead of Wednesday's policy decision, major averages were resilient in the face of a massive rebound in oil and natural gas prices, as well as some disappointing earnings guidance from economic bellwethers UPS(UPS) and 3M(MMM). Bonds reversed course and gained ground Tuesday, bucking a strong consumer confidence report and potential data land mines ahead, including Wednesday's advanced fourth-quarter GDP report.

The Dow Jones Industrial Average added 0.3% to close at 12,523.31, while the S&P 500 jumped 0.6% to close at 1428.82. The Nasdaq Composite gained 0.3%, to close at 2448.64.

UPS spent most of the day down, trading as low as $70.38 intraday, but finished well off of its lows, down 1.3% at $72.70. The company's full-year outlook fell short of analysts' expectations, and the company blamed a slowing U.S. economy for the glum view. 3M fell 5.4% after its CEO said moderating global economic growth is responsible for its soft earnings guidance.

Procter & Gamble(PG) gave the market a strong earnings report and boosted is 2007 guidance, but its shares slipped 0.5% on the day. On the flip side, disability insurer UnumProvident's(UNM) shares climbed 10.5% Tuesday on its strong earnings report and healthy guidance.

The government will release its fourth-quarter GDP estimate at 8:30 a.m. Wednesday. The consensus expectation is for growth of 3%. The markets will also digest the fourth-quarter employment cost index Wednesday morning. Analysts expect a 1% increase from the third quarter, when wages were rising at the strongest annual rate since the second quarter of 2002.