Wall Street was little changed on Tuesday morning as investors assessed a host of corporate earnings reports and braced for the Federal Reserve’s policy meeting.
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The Dow Jones industrial average fell 1.58 points, less than 0.1%, to 18472.17. The 20-City Composite recorded a year-over-year gain of 5.2 percent, down from 5.4 percent in April.
OIL: Benchmark U.S. crude dropped 22 cents to $42.70 per barrel on the New York Mercantile Exchange while Brent crude, used to price worldwide oils, fell 47 cents to $44.40 a barrel in London.
Verizon, which is included in the Dow, dropped 0.2 per cent.
The Federal Open Market Committee (FOMC) begins a two-day meeting later in the day to decide whether the U.S. economy is strong enough to absorb an interest rate hike. Analysts expect the central bank to hold off on an interest rate hike this month – and possibly for months to come.
Thus far, with 159 companies reporting, earnings are on track to contract 4.5%. New York-listed shares fell 1.8 percent in extended-hours trading.
ENERGIZED: Southwestern Energy jumped $1.19 cents, or 9 percent, to $14.40. The bank rates the stock a “buy”, however, with a 12-month price target of $115.
Earnings of S&P 500 companies are expected to fall 3.7% in the second quarter, compared with a 5% decline expected at the start of the earnings season, according to Thomson Reuters data.
The Standard & Poor’s 500 index rose 0.7 of a point, or 0.03 percent, to 2,169.18. “We anticipate hawkish talk, no action, as the Fed would like to bring up expectations of a rate hike in light of better economic data in the USA and as Europe is not showing utter disaster”, Jaffee said.
The Nasdaq is up 132.40 points, or 2.6 percent.
NOT SO SWEET: Honeywell International fell $4.34, or 3.7 percent, to $114.32 to lead industrial stocks lower. USA crude oil is down 12 percent this month. Coke has faced headwinds in the USA and internationally as more consumers move away from sugary drinks.
Bond prices rose. The yield on the 10-year Treasury note fell to 1.51 percent from 1.56 percent, most of the gains coming after the Fed’s announcement. The dollar rose to 105.45 yen from 104.63 yen and the euro fell to $1.1052 from $1.0986.
Five of the 10 major S&P sectors rose, while a 1.49 per cent drop in the telecom services index weighed heavily.
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OTHER ENERGY TRADING: Heating oil fell 3 cents to $1.30 a gallon, wholesale gasoline futures fell 2 cents to $1.32 a gallon and natural gas fell 4 cents to $2.67 per 1,000 cubic feet.
