At midday: TSX edges up as Fed meeting gets underway The Toronto stock market was slightly higher Tuesday as traders look to a two-day U.S. Federal Reserve meeting and what the central bank may decide to do about cutting back on asset purchases. The S&P/TSX composite index climbed 19.17 points to 13,203.58. The Canadian dollar was down 0.21 of a cent at 94.25 cents US as the greenback strengthened ahead of a Fed announcement expected mid-afternoon Wednesday. U.S. indexes were lacklustre with the Dow Jones industrials down 40.11 points to 15,844.46, the Nasdaq fell 15.22 points to 4,014.3 and the S&P 500 index was down 8.13 points to 1,778.41. Traders played it cautious ahead of the Fed announcement as they weigh the odds of the Fed starting to taper bond purchases, which have been at US$85-billion a month. This third episode of quantitative easing by the Fed has underpinned a strong rally in many stock markets while keeping long-term rates low. Opinion is split, with many analysts believing incoming chair Janet Yellen may hold off until March, allowing the Fed to collect more data pointing to a steadily improving economic climate and particularly job creation. "I think people are more divided about (the outcome of) this Fed meeting than any single Fed meeting in a very long time," said Colin Cieszynski, market analyst at CMC Markets Canada. And because of that, even though the markets are pretty quiet now, whatever comes out of this, you're going to have a fairly significant reaction. The markets aren't moving much today because people don't want to get themselves too far overextended. Cieszynski thinks the Fed will likely do nothing this time around beyond commenting that they're ready to start soon. Failing that, it would announce a small taper. But he said it's only a matter of time before the Fed acts. It's not like if they don't taper then they will keep QE going for another year or something. It's only postponing the inevitable. Gains on the Toronto market were led by a 2.5 per cent gain in the tech sector. Constellation Software (TSX:CSU) rose $16.69 or eight per cent to $223.38, adding to Monday's 5.2 per cent rise after it said it will pay the equivalent of about C$350-million to acquire Dutch software company Total Specific Solutions (TSS) BV. Auto parts companies helped push the consumer discretionary segment up 0.6 per cent with Martinrea International (TSX:MRE) ahead 31 cents to $9.30. The energy sector was up 0.15 per cent while the January crude contract on the New York Mercantile Exchange was 19 cents higher at US$97.67 a barrel. The gold sector faded 0.6 per cent while February bullion fell $14.60 to US$1,229.80 an ounce. Iamgold (TSX:IMG) faded four cents to C$3.65. The base metals sector was down 0.1 per cent with March copper unchanged at US$3.33 a pound. The key piece of economic news Tuesday was U.S. inflation figures for November. Lower gasoline costs kept overall U.S. consumer prices unchanged in November following a 0.1 per cent decline in October. Meanwhile, Statistics Canada reported that manufacturing sales increased by one per cent in October to $50.1-billion. Economists had expected a decline of 0.3 per cent. In corporate news, Saputo Inc. (TSX:SAP) says it's willing to pay substantially more for Australia's Warrnambool Cheese and Butter if it can get as much as 90 per cent of its stock. The company is maintaining its base offer at AU$9 per share but says it will pay as much as AU$9.60 cash per share if it gets at least 90 per cent of WCB's stock. That would value the deal at C$510-million. Saputo shares rose 41 cents to $47.58. Hudson's Bay Co."s (TSX:HBC) chief operating officer, Donald Watros, will become the retailing company's president in February. Watros is a former chief administrative officer of Saks Fifth Avenue, which HBC acquired in November for about $2.9-billion. HBC shares were up 30 cents to $18.60. European bourses were lower as London's FTSE 100 index lost 0.31 per cent, Frankfurt's DAX was off 0.45 per cent while the Paris CAC 40 fell 1.08 per cent.