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Stocks are lower ahead of the Fed decision



Stocks traded lower Wednesday, ahead of an expected Federal Reserve cut, while a flood of quarterly corporate results continued to mix, but better than some analysts had feared.

What are the main indexes doing?

The Dow Jones Industrial Average was down about 25 points at 27,046, while the S&P 500 was 4 points at 3,036 = 3. The Nasdaq was about half a point higher, around 8,264.

S&P 500

SPX, -0.13%

notched an intra-day high on Tuesday morning, but ended slightly lower after stocks lost steam. The major index, which had a record start on Monday, lost 2.53 points on Tuesday, or 0.1

%, to end at 3,036.89. The Dow

DJIA, -0.09%

gave up 19.30 points, or 0.1%, to close at 27,071.42, while the Nasdaq Composite

COMP, -0.18%

tossed 49.13 points, or 0.6%, and closed at 8,276.85.

What drives the market?

The Federal Reserve will be in the blink of an eye. Policy makers are broad, but not universal, expected to lower the feed fund rate by a quarter percentage point, the third cut this year. The most important question is the signal that the central bank and chairman Jerome Powell will send about the prospect of further cuts. Businesses have scaled down games for further reductions later this year and in 2020.

Read: 3 Things To Look For From The Fed Meeting

See Also: Meet The Lone Economist who thinks the Fed might just leave interest rates unchanged

With quarter-point interest rates reflecting up to 95% in asset prices, "there's only little potential left to be explored on the interest rate front," Ipek Ozkardeskaya, senior market analyst at London Capital Group, said in a statement. a note.

means the Fed's statement “is what matters most to investors in today's decision announcement. The sweet mix of better-than-expected third-quarter earnings and the momentum of trade negotiations with China suggest an increased likelihood of a hawkish Fed statement, ”she said.

Some investors actually signal that the Fed going to the sidelines may steal stocks from a source of support that helped them rally back to record territory. The Fed is entitled to announce its political decision at 2 p.m. Eastern, followed by Powell's news conference at 2:30 pm

Also Read: Can the stock market march higher without the promise of more Fed cuts?

Don't miss: This is how the stock market tends to perform after the Fed has cut interest rates three times in a row

Revenues have been "fine" and trading activity in recent weeks. has been about repositioning, said Sahak Manuelian, head of equity trading for Wedbush Securities. As some political headwinds alleviate and central banks remain accommodating, there are traders who "feel that I'm too far into pins and defenses, and I need some exposure to the business cycle."

Market breadth has also improved, Manuelian said, and helped confirm some of the march higher for stock prices. And the US gross domestic product report, which is better than expected, is another sign that consumers are not slowing down, Manuelian told MarketWatch.

U.S. Goss Domestic Product, the official economy scorecard, grew at a 1.9% annual rate in the third quarter, the Department of Commerce said Wednesday, just a tick from 2% growth in the spring. Confident consumers kept the US economy down in the third quarter, spending more than enough to offset a major fall in business investment related to falling oil prices and the ongoing trade war with China.

See: Confident Consumers Keep US Economy Smaller, GDP Gains 1.9% in Third Quarter

Private sector employers added 125,000 jobs in October, said payroll processor ADP, placed in the consensus forecast.

Markets were also waiting to hear about a rescheduling for the expected Asia-Pacific Economic Cooperation meeting, in which US President Donald Trump intended to meet with Chinese President Xi Jinping to continue the trade talks. China suggested the talks should take place in Macau, according to a Fox News report.

Earlier, Reuters reported that the US-China interim agreement might not be completed in time for signing at the upcoming APEC meeting, and that the Trump administration's demand that Beijing commit to buy more US agricultural products has become an important break point during negotiations.

Which companies are in focus?

Investors continue to wade through the busiest season of the revenue season.

General Electric Co.

GE, + 11.08%

shares jumped almost 11% after reducing the loss in the third quarter.

Yum Brands

YUM, -8.72%

reported earnings in line with expectations ahead of the opening clock, but the stock traded significantly lower in the middle of the morning.

Royal Caribbean Cruises Ltd.

RCL, -2.84%

shares jumped in early trading despite lack of expectations of both earnings and earnings per share, but then slipped approx. 2% lower.

Shares of Molson Coors Brewing Co.

TAP, -1.06%

was down more than 2% after saying that 2019 revenue would be flat to slightly down.

Advanced Micro Devices Inc.

AMD, -1.51%

was lower in morning operations after the chip maker delivered revenue in the third quarter late on Tuesday which was in line with estimates and said that it expected the same for the current quarter.

See: AMD looks like a bright star in a darkened breeze sector

In other company news, Fiat Chrysler Automobiles NV

FCAU, -0.28% [19659044] FCA, + 8.65%

and Peugeot maker PSA Group of France

UG, + 3.45%

confirmed that they are in talks about a potential combination, which would create a $ 46 billion trans-Atlantic auto giant that would rank as the world's fourth largest by volume .

Anixter International Inc.

AX, + 14.78%

said on Wednesday that it has been agreed to be purchased by a subsidiary of the private corporation Clayton, Dubilier & Rice in a deal worth $ 3.8 billion. CD&R pays $ 81 for each share of grid and electrical products, a 13% premium to Tuesday's closing price of $ 71.40. Shares rose 14%.

Results from Apple Inc.

AAPL, -0.63%

expires after the clock, along with revenue from Facebook Inc.

FB, -1.10%

and ride-hailing company Lyft Inc.

LIFT, -1.03% .

What do other markets do?

U.S. Treasury returns slipped ahead of the Fed's policy decision. The return on the 10-year US Treasury

TMUBMUSD10Y, -2.20%

was three basis points lower, at 1.80%. The price of West Texas Intermediate crude oil

CL00, -1.21%

was down by 2 cents, 1.1%, to 54.92.

Gold for December delivery

GCZ19, + 0.41%

on Comex rose $ 5.70, or 0.4%, to trade at $ 1,449.30 ounces, ahead of the Fed decision.

Oil futures extended earlier losses on Wednesday after the Energy Information Administration reported a larger weekly US commodity increase of nearly 6 million barrels, but gasoline stocks fell slightly more than expected. West Texas Middle Oil for delivery in December

CLZ19, -1.21%

was down 51 cents, or 0.9%, to the $ 55.03 barrel on the New York Mercantile Exchange. First month of December Brent crude oil

BRNZ19, -0.57% ,

which expires at Thursday's settlement, fell by 38 cents, or 0.6%, to $ 61.21 a barrel at ICE Futures Europe.

In Asia, China CSI 300

000300, -0.49%

lost 19 points, 0.5%, to 3,871.23. STOXX Europe

SXXP, -0.13%

dipped less than one point to 398.22.


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