Wall St falls as focus shifts to Fed rate decision

Oct 31 (Reuters) – US stocks fell on Monday, potentially blocking a two-week rally in the S&P 500 and Nasdaq indices as investors turned cautious ahead of this week’s Federal Reserve rate-setting meeting.

A Fed policy decision is due on Wednesday, with investors expecting a fourth straight rate hike of 75 basis points to curb decades of high inflation.

Hopes of an easing of the central bank’s aggressive stance on rate hikes had buoyed equities in recent weeks, but post-decision comments from Fed officials, along with this week’s nonfarm payrolls data, would be crucial in shaping expectations for set future interest rates.

“If this (Fed pivot) is indeed the conclusion of Wednesday’s session commentary, the rally we had would provide further upside potential for stock markets,” said Michael James, managing director of equities trading at Wedbush Securities in Los Angeles.

apple inc (AAPL.O) down 1.4%. That’s according to a Reuters report The production of his iPhones could collapse by up to 30% over the next month due to tightening COVID-19 curbs in China.

Amazon.com shares (AMZN.O) and Google-owner Alphabet (GOOGL.O) also fell by 1.4% and 1.5% respectively.

Among the sectors of the S&P 500, information technology (.SPLRCT) and communication services (.SPLRCL) were the leading detractors, down 1.2% and 1.5% respectively.

energy stocks (.SPNY) reversed gains after the White House said US President Joe Biden, who has expressed outrage at oil companies making record profits while Americans are paying high fuel prices, will issue a statement on the matter later in the day. Continue reading

Energy companies like Chevron (CVX.N) and ExxonMobil (XOM.N) have beaten earnings estimates this quarter and benefited from rising energy prices, in contrast to big tech companies, which have largely disappointed investors.

Meanwhile, gains in shares of health insurer UnitedHealth (UNH.N) and some financial firms limited declines in the Dow, which, depending on daily movements, is expected to see its biggest monthly rise in over four decades.

“What you’ve seen is money moving away from tech into non-tech sectors that have given you better earnings over the past two weeks,” James said.

With about half of the companies in the S&P 500 so far reporting quarterly earnings, Refinitiv’s third-quarter earnings growth estimate for the index has been revised down slightly to 4% from last week’s 4.1%.

Meanwhile, traders’ bets on a 50 basis point rate hike in December were at 44.6%, according to CME Group’s Fedwatch tool.

At 12:41 p.m. ET, the Dow Jones Industrial Average (.DJI) fell 129.55 points, or 0.39%, to 32,732.25, the S&P 500 (.SPX) fell 26.74 points, or 0.69%, to 3,874.32 and the Nasdaq Composite (.IXIC) fell 104.66 points, or 0.94%, to 10,997.79.

Among the individual stocks TuSimple Holdings (TSP.O) plunged 46.8% after the trucking company said its board had fired its chief executive officer.

Global Payments Inc (GPN.N) fell 6.7% after the company forecast full-year sales below estimates.

At a 1.21 to 1 ratio on the NYSE, bearish issues outweighed the leaders. At a 1.12 to 1 ratio on the Nasdaq, declining issues outweighed the leaders.

The S&P index posted 22 new 52-week highs and seven new lows, while the Nasdaq posted 101 new highs and 79 new lows.

Reporting by Amruta Khandekar and Sruthi Shankar in Bengaluru; Edited by Maju Samuel and Anil D’Silva

Our standards: The Thomson Reuters Trust Principles.