NEW YORK: Wall Street stocks fell on Monday (Oct 31), snapping the Dow's winning streak, following disappointing Chinese and European data as markets look ahead to a key US Federal Reserve (Fed) decision.
China'’s purchasing managers' index, a key gauge of manufacturing, fell to 49.2 in October, below the 50-point mark separating growth from contraction due to Covid-19 restrictions.
Meanwhile, eurozone economic growth fell to 0.2% in the third quarter, as inflation hit another record high on the back of soaring energy prices.
Ending six straight days of gains, the Dow Jones Industrial Average fell 128.85 points, or 0.39%, to 32,732.95, the S&P 500 lost 29.08 points, or 0.75%, to 3,871.98 and the Nasdaq Composite dropped 114.31 points, or 1.03%, to 10,988.15.
For the month, the Dow jumped 13.95%, the S&P climbed 7.99% and the Nasdaq advanced 3.9%.
Analysts said the losses reflected profit-taking after historically strong gains throughout October.
Markets are looking ahead to this week’s Fed meeting. Investors are expecting the US central bank to again undertake a 0.75 percentage point interest rate increase in its latest move to combat inflation.
But there will be much focus on the tone from Fed chair Jerome Powell at a news conference tomorrow (Nov 2) following the policy announcement. Hopes that the Fed could soon moderate its stance in light of weakening economic data have lifted stocks in recent weeks.
The agenda also includes October jobs data and reports on the manufacturing and services sectors, as well as earnings from Pfizer and Starbucks.
“It is pretty much a foregone conclusion, it has been almost a 100% probability for at least three weeks now that it would be three-quarters of a point and very little chance that it is going to be more or less than that, but there is always apprehension on the part of everyone just waiting for that to be done,” said Randy Frederick, managing director, trading and derivatives, Charles Schwab in Austin, Texas.
“People are going to be digesting what is said on Wednesday about what happens on Dec 14. My hope is that would be a quarter point. In reality, it is probably going to be half a point, but even that would be a very positive sign for the market.”
Apple Inc lost 1.54% after a Reuters report said production of its iPhones could slump by as much as 30% next month due to tightening Covid-19 curbs in China.
Megacap growth names such as Amazon.com and Google owner Alphabet which have been under pressure in the rising rate environment, were also lower, down 0.94% and 1.85%, respectively. – AFP, Reuters