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U.S.stocks fall ahead of Fed statement

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Frankfurt Stock Exchange, yesterday.

Frankfurt Stock Exchange, yesterday.

UNITED States (U.S) stocks fell yesterday ahead of a highly anticipated statement and news conference by the Federal Reserve later in the session, with the Fed seen giving clearer clues on how soon it plans to tighten monetary policy.

Shares were off their lows as utilities, expected to suffer if interest rates rise, and energy companies, recently hurt by lower crude prices, were the unexpected leaders of the session.

The U.S. central bank is expected to provide indications on the timing of its first interest rate hike in nearly a decade, as its two-day meeting ends later in the day. The Fed is assessing if the U.S. economic recovery can hold up against collapsing oil prices and a soaring dollar.

The U.S. dollar has strengthened against most major currencies as central banks around the world ease monetary policy while the Fed is on track to tighten.

“There’s not much of a move really; it’s more stock-specific and the market is basically in wait-and-see mode,” said Richard Sichel, chief investment officer at Philadelphia Trust Co.

“If the Fed is more hawkish hopefully investors could see that as a sign the economy is doing well.”

At 12:19 p.m. EDT (1619 GMT) the Dow Jones industrial average .DJI fell 105.58 points, or 0.59 percent, to 17,743.5, the S&P 500 .SPX lost 8.32 points, or 0.4 percent, to 2,065.96 and the Nasdaq Composite .IXIC dropped 13.19 points, or 0.27 percent, to 4,924.24.

U.S. crude fell for a seventh straight session, hitting a fresh six-year low at $42.03 per barrel. It was last down 2.6 percent at $42.33. The S&P 500 energy sector .SPNY however was up 0.4 percent and is on track to post its first positive week in five.

A lock-up period in Alibaba shares expired yesterday, with a larger one expiring in September. The stock hit a high of $120 in November and closed Tuesday at $84.50, about 24 per cent above its IPO price. Shares were little changed at $84.43 on nearly twice the average volume of the past five sessions.

FedEx shares fell by 2.3 per cent to $171.64 after the package delivery company forecast full-year profit below analyst estimates.

Oracle rose 2.6 per cent to $43.97 a day after it posted flat third-quarter revenue and slightly lower profit. However, it raised its quarterly dividend 25 per cent to 15 cents a share.



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