US: Stocks edge down as Federal Reserve stays dovish on rates

[NEW YORK] Wall Street stocks finished a choppy session slightly lower on Tuesday after Federal Reserve Chair Jerome Powell reiterated a dovish approach to further interest rate hikes.

The Dow Jones Industrial Average declined 0.1 per cent to end the day 26,057.98.

The broad-based S&P 500 also lost 0.1 per cent to close at 2,793.90, as did the tech-rich Nasdaq Composite Index, which finished at 7,549.30.

Mr Powell avoided any major surprises in his first of two days of congressional testimony, telling the Senate Banking Committee that inflation would fall further below the Fed's two per cent target in spite of solid growth and job gains and that the central bank would be "patient" before adjusting interest rates.

"The market heard what it wanted to hear," said Nate Thooft, a senior portfolio manager at Manulife Asset Management. "He remains dovish and data-dependent."

Consumer confidence rebounded strongly in February as shoppers put the Wall Street rout and extended government shutdown of recent months behind them, according the Conference Board survey.

After a nearly 20 per cent jump in US stocks since late December, some analysts think the market will find it hard to rise much further absent a positive catalyst, such as a final trade deal between the US and China.

Negotiators from Beijing and Washington have reported progress on the talks, and the next round of tariffs has been delayed, but there is still no final deal.

Among individual companies, Caterpillar slumped 2.4 per cent following a downgrade by UBS, which predicted the industrial giant would achieve peak earnings in 2019 but decline in 2020 as it faces headwinds in the construction and oil and gas markets.

Fellow Dow member Home Depot shed 0.8 per cent as it projected slightly lower 2019 sales growth compared with last year.

Tesla Motors dipped 0.3 per cent after the US Securities and Exchange Commission asked a federal judge to declare the company's CEO Elon Musk in contempt of court after a series of tweets the agency said violated a prior settlement regarding other statements on Twitter.

AFP