Wall Street ends strong month on weaker note; focus on Fed meeting By Reuters

© Reuters. FILE PHOTO: The Wall Street sign outside the New York Stock Exchange in New York City, New York, US, October 2, 2020. REUTERS/Carlo Allegri

It’s Chuck Mikolajczak

NEW YORK (Reuters) – U.S. stocks fell on Monday, as major indexes closed a strong month of gains on a weak footing, as investors’ attention turned to this week’s Federal Reserve meeting.

The central bank is expected to raise interest rates by 75 basis points on Wednesday at the end of its two-day meeting, but investors will be watching for any signs that the Fed might consider lowering interest rates in the future.

Hopes that the Fed could move away from its rate hike policy have pushed up interest rates in recent weeks, with gains of nearly 9% over the past two weeks. The Dow posted its biggest monthly gain since January 1976 and its biggest October gain since 1900.

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Comments from Fed officials after the policy decision and labor market data later this week will help shape market expectations for future hikes starting at the December meeting.

“It was a prediction, it’s been almost a 100% chance for three weeks now that it’s going to be three-quarters of a point and a very small chance that it’s going to be more or less than that, but there’s always a fear for anyone who’s just waiting for that to happen,” he said. Randy Frederick, general manager, sales and derivatives, Charles Schwab (NYSE:) in Austin, Texas.

“People will share what is said on Wednesday about what is happening on Dec. 14. My expectation is that it will be a third. Honestly, it will probably be half a point, but even that would be very difficult. It is a good sign for the market.”

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The S&P 500 lost 29.08 points, or 0.75%, to 3,871.98 and fell 114.31, or 1.03%, to 10,988.

For the month, the Dow jumped 13.95%, the S&P rose 7.99% and the Nasdaq rose 3.9%.

Apple Inc (NASDAQ:

Megacap growth names such as Amazon.com (NASDAQ:) and Alphabet owned by Google (NASDAQ:) which have been pressured in the price area, were also low, down 0.94% and 1.85%, respectively.

Almost all 11 S&P 500 sectors fell, with technology and communications services the best performers with declines of more than 1%. Energy took the lead alone before US President Joe Biden’s comments on the oil industry later on Monday.

Strong companies like Chevron (NYSE: ) and Exxon Mobil records (NYSE: ) beat earnings estimates this quarter, benefiting from rising energy prices, unlike Big Tech companies that have disappointed investors.

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“Shares, energy, short-dated assets, industrials … that’s what’s working,” said Eric Diton, president and managing director at The Wealth Alliance in Boca Raton, Florida.

Nearly half of the companies in the S&P 500 have reported quarterly results so far, with third-quarter earnings estimates at 4%, according to Refintiv data, down slightly from 4.1% last week.

Global Payments (NYSE:) Inc fell 8.82% after the company reported below full-year revenue.

Volume on US exchanges was 11.53 billion shares, compared to 11.52 billion shares in the previous 20 trading days.

Bearish news outnumbered advancing news on the NYSE by a 1.29-to-1 ratio; on the Nasdaq, the ratio is 1.22-to-1 in favor of the bearers.

The S&P 500 posted 24 new 52-week highs and 8 new lows; The Nasdaq Composite recorded 137 new highs and 113 new lows.


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