• Tuesday, October 22, 2019

US STOCKS-Wall Street subdued as focus shifts to Fed

Discussion in 'World Affairs' started by phancong, Sep 17, 2019.

  1. phancong

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    Reuters
    •September 17, 2019
    (For a live blog on the U.S. stock market, click or type LIVE/ in a news window.)

    * Energy shares drop as oil prices slide

    * Saudi to recover oil supplies sooner than expected - sources

    * Home Depot drops after Guggenheim downgrade

    * Corning cuts forecast for display volumes; shares fall

    * Dow off 0.08%, S&P up 0.07%, Nasdaq 0.08% higher (Updates prices, adds details)

    By Medha Singh

    Sept 17 (Reuters) - U.S. stocks were little changed on Tuesday as investors moved to the sidelines ahead of the Federal Reserve's two-day policy meeting, while the impact of weekend attacks on Saudi Arabia's biggest oil refinery faded.

    Equity markets took a hit on Monday as the attacks wiped out half of Saudi Arabia's oil production, sending oil prices soaring, while fuelling geopolitical tensions.

    But President Donald Trump's statement that he does not want war and a Reuters report that Saudi Arabia was close to restoring 70% of the oil production lost calmed investor nerves.

    The benchmark S&P 500 index recovered early losses to rise slightly, with the so-called defensive consumer staples , utilities and real estate sectors posting the biggest gains.

    The energy index tracked a drop in oil prices, after recording its best one-day surge since January on Monday.

    The U.S. central bank concludes its policy meeting on Wednesday, with traders currently expecting a 63.5% chance of a quarter percentage point cut from the Fed this week, down from 88.8% on Friday, according to CME's FedWatch.

    "It's just typical trading on the vigil of a Fed meeting," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

    "We haven't seen any panic from what happened over the weekend. I think (the Fed) will stick with a quarter of a percentage point cut even after the Saudi attack."

    Banks, which tend to underperform in a lower interest rate environment, fell 0.95% and were the biggest drag on the S&P 500.

    Since the last interest rate cut in July, U.S. economic data has shown mixed signals about the domestic economy. While strong retail sales and wage growth have bolstered consumer confidence, a protracted U.S.-China trade war has weighed on manufacturing and business sentiment.

    Latest data showed U.S. manufacturing output increased more than expected in August, rebounding from a drop in July, while homebuilders' optimism grew unexpectedly brighter in September.