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US: Wall St lower as earnings roll in; Fed meet eyed
[NEW YORK] Wall Street opened slightly lower on Monday as investors braced for another set of corporate earnings and awaited the Federal Reserve's monetary policy meeting.
The Federal Open Market Committee (FOMC), which has had to defer raising interest rates, will begin its two-day meeting on Tuesday to decide whether the US economy could absorb a rate increase in the near term.
The FOMC is scheduled to announce its decision on Wednesday at 2:00 pm ET (1800 GMT).
Even with recent data pointing to the US economy being on strong footing, the Fed is still cautious about pulling the trigger due to global uncertainty sparked by Britain's vote to leave the European Union.
Traders have priced in a 14.7 per cent chance of a rate hike in September and a 38.5 per cent chance in December, according to CME Group's FedWatch tool.
Low expectations of rate hikes, robust economic data and higher-than-expected second-quarter earnings have fueled a record-setting rally on Wall Street in the past two weeks.
Investors are now pinning their hopes on an improvement in corporate earnings to justify the market's valuation.
Earnings of the benchmark index's components are expected to fall 3 per cent, compared with a 5 per cent decline expected at the start of the earnings season.
Drugmaker Gilead and chipmaker Texas Instruments are scheduled to report results after market close.
"We're in a period where the market's looking really tired," said Matthew Tuttle, chief investment officer of Tuttle Tactical Management. "I think we're going to be in a wait-and-see phase today, ahead of the Fed's decision."
At 9:39 am ET (1339 GMT), the Dow Jones Industrial Average was down 51.99 points, or 0.28 per cent, at 18,518.86.
The S&P 500 was down 5.61 points, or 0.26 per cent, at 2,169.42.
The Nasdaq Composite was down 8.54 points, or 0.17 per cent, at 5,091.62.
All 10 major S&P sectors were lower, led by a 0.7 per cent drop in energy stocks, which was weighed down by weak oil prices.
Exxon and Chevron were down 0.7 per cent. Exxon was the top drag on the S&P 500, while Chevron had a similar impact on the Dow.
Yahoo's shares were down 1.8 per cent at $38.66, after agreeing to sell its core internet business to Verizon for US$4.8 billion. Verizon's shares fell 0.4 per cent.
Micron shares surged 6.7 per cent to $14 after a Credit Suisse analyst said the company's new rights agreement increased prospects of a strategic investment in the near term. The stock gave the biggest boost to the S&P and the Nasdaq.
Declining issues outnumbered advancing ones on the NYSE by 1,605 to 993. On the Nasdaq, 1,321 issues fell and 957 advanced.
The S&P 500 index showed 15 new 52-week highs and no new lows, while the Nasdaq recorded 34 new highs and five new lows.