US Stocks Fall Ahead of Fed Decision 09/18 09:29
Stocks moved broadly lower on Wall Street in early trading Wednesday ahead
of a highly anticipated decision from the Federal Reserve on interest rates.
NEW YORK (AP) -- Stocks moved broadly lower on Wall Street in early trading
Wednesday ahead of a highly anticipated decision from the Federal Reserve on
The Fed is expected to cut its benchmark interest for a second time this
year. Close attention will be paid to any clues Fed Chairman Jerome Powell
gives about future rate policy during a 2:30 p.m. press conference.
Industrial, technology and bank stocks were among the biggest losers in the
early going as investors headed cautiously for less-risky holdings.
Adobe fell 3.8% and led the tech sector lower after giving investors a weak
Banks, including JPMorgan and Bank of America, moved lower. Bond prices rose
and the yield on the 10-year Treasury fell to 1.76% from 1.81% late Tuesday.
Investors typically shift money into bonds when they grow more concerned about
the economy's health. For banks, lower bond yields mean less lucrative interest
rates on loans.
FedEx plunged and dragged down industrial stocks after issuing a
disappointing earnings report.
Utilities held up the best in the early going and swayed between small gains
and losses. The sector is typically considered a safer place to park money amid
concerns about economic growth. Consumer product makers, such as Kraft and
Colgate, showed small gains.
Investors largely expect the Fed to cut short-term interest rates by another
quarter of a percentage point, following a similar cut in late July. That
marked the first time in more than a decade that the central bank cut rates as
it tries to shield the United States from the pain of a slowing global economy
and the effects of the trade war with China.
U.S. and Chinese representatives plan to hold trade talks next month in
Aside from the rate cut, investors will also be listening for the Fed's
assessment of the nation's economic health any other cues from Powell about the
central bank's future intentions. Back in July, the Dow Jones Industrial
Average dropped more than 300 points when Powell refused to commit to a long
cycle of rate cuts.
KEEPING SCORE: The S&P 500 index fell 0.3% as of 10 a.m. Eastern time. The
Dow fell 68 points, or 0.3%, to 27,041. The Nasdaq rose 0.3%.
OVERSEAS: Stocks in Europe edged higher. A government report showed that
inflation in Britain fell to a near three-year low in a potential boon to
households as the nation faces a potentially painful economic exit from the
European Union. Britain is scheduled to leave the trading bloc on Oct. 31 and
might not have a deal in place that regulates trade and other issues with
European Union nations.
Asian stocks were mixed. Export data from Japan show that the U.S.-China
trade war is taking a toll on demand across the region. Japan said exports fell
8% in August, with declines in machinery, vehicles and chemicals.
OIL SLICK: Oil prices continued pulling back from a 14% spike on Monday as
Saudi Arabia brings back production at an oil facility attacked over the
weekend. It said half of the production cut by the attack is already restored
and plans on full production by the end of the month. Benchmark U.S. crude fell
$1.09 to $58.22 per barrel. Brent crude, the international standard, fell 84
cents to $63.70.
MISSED DELIVERY: FedEx fell 12.8% after reporting a disappointing drop in
fiscal first quarter profit and cutting its full-year forecast as the trade war
takes its toll on economic growth. The company is also dealing with the loss of
its lucrative contract with Amazon. FedEx cut ties with the retail giant over
the last several months.
CEO Fred Smith said escalating tariffs and trade tension between the U.S.
and China have lowered industrial production and hurt the international
shipment of goods.
TOUGH TO CHEW: Chewy fell 6.4% to $28.31 after the online pet store's fiscal
second quarter loss was far wider than Wall Street had expected. The company
debuted on the New York Stock Exchange in June at $22 per share and closed at
$34.99 on its first day.