Is it a blip or a trend????

A WALL STREET JOURNAL ONLINE NEWS ROUNDUP

Futures activity suggested that stocks would pull back after the previous day's rally, as investors await the outcome of a two-day Federal Reserve meeting.

About 30 minutes before the start of trading in New York, futures on the Dow Jones Industrial Average were lower by about 80 points. S&P 500 and Nasdaq futures each declined roughly five points. Futures trading isn't always a reliable indicator of the market's early trajectory.

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• IBM Eyeing SunMicrosystems

A surprising jump in housing starts last month helped drive stocks to the fifth winning session in six Tuesday. The Dow industrials rallied by 178.73 points, leaving the blue-chip gauge 13% above the bear-market lows it hit on March 9. Major indexes are at their highest levels in a month.

The Federal Reserve will conclude a two-day meeting Wednesday. The central bank is expected to leave interest rates unchanged, but investors will be parsing the Fed's post-meeting statement for any signals that its outlook has changed or that it will take more measures to lubricate money markets. The Fed had said in its last statement that it was prepared to purchase long-term Treasurys if needed to improve credit conditions.

Most commentators expect that the Fed won't announce such steps Wednesday as long-term interest rates remain low, which has driven down mortgage rates. Data Wednesday from the Mortgage Bankers Association showed mortgage applications rose 21% last week as the average 30-year fixed rate fell to 4.89%. But economists expect the Fed will keep the possibility of such purchases open.

Treasurys were gaining in recent trading as stocks weakened; the yield on the 30-year bond was around 3.81%. In other economic news, consumer-price data were released for February, showing a 0.4% increase and raising the odds that the U.S. will avoid a protracted deflationary spiral.

Shares of Sun Microsystems jumped 50% after the Wall Street Journal reported thatInternational Business Machines is in talks to acquire the company. IBM is likely to pay at least $6.5 billion in cash, or double Sun's closing price Tuesday. IBM shares were down about 3%.

Most European stock markets fell. The pound dropped against the dollar after a dismal report on U.K. employment. Asian indexes gained; the Nikkei 225 rose 0.7%. The Bank of Japan said that it will increase its purchases of government debt and that it was considering providing loans to banks.