Wall Street pares early gains, closes modestly lower
After starting the day flat, major equity indexes in the U.S. recorded small gains during the first couple of hours of the session but struggled to rise further as the S&P Information Technology and Consumer Staples indexes suffered sharp losses.
In fact, financials and industrials were the only two sectors that were able to close the day higher. A stronger probability of a 25 basis points December rate hike, which is now at 75% according to the CME Group FedWatch Tool, boosted the bank shares for the second day in a row, allowing the Financials Index .SPSY to add 0.2%.
"Today’s movement is most likely a give-back as people digest the Fed statement and press conference. Clearly, the Fed doesn’t have answers on the 2017 low inflation weakness, but they’re still very sensitive to falling behind the curve so they want to stay in front of the inflation curve,” Michael Dowdall, investment strategist at BMO Global Asset Management, told Reuters.
On the other hand, Apple shares came under a heavy pressure amid mixed reviews on its new smart watch and lower-than-expected pre-orders for the new iPhone, losing 1.7% on the day and dragging the Information Technology Index .SPLRCT down 0.6%.
The Dow Jones Industrial Average fell 51.02 points, or 0.23%, to 22,361.57, the S&P 500 dropped 7.35 points, or 0.29%, to 2,500.89 and the Nasdaq Composite lost 33.20 points, or 0.51%, to 6,422.84.
Headlines from the NA session:
- Russian OilMin Novak: OPEC and non-OPEC compliance with pact was 116% in August
- US FOMC: Let the great adjustment begin - BNP Paribas
- Fed still on track for hikes - HSBC
- Fed: dovish long-term - Deutsche Bank
- Fed policy is still likely to feature strongly as an influence in coming months - Rabobank
- US Pres. Trump announces executive action targeting companies trading with N. Korea - LiveSquawk
- US LEI: Strength in underlying components suggests economic growth should continue - Wells Fargo
- FOMC projections: net result is a rise in real short-term rates - Wells Fargo
- US: Weekly initial claims was 259,000, a decrease of 23,000 from previous week
- Philly Fed: Index for current manufacturing activity in the region increased 5 points to 23.8
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
