Nine of the ten main sectors end in negative territory led by materials and energy sectors
U.S. stocks closed lower on Monday, 14 September 2015 as investors remained hesitant to buy stocks ahead of the Federal Reserve's much anticipated policy meeting this week. The Federal Open Market Committee begins a two-day meeting on Wednesday. A cautious tone was set during overnight action after China and Japan both released disappointing industrial production reports. Equity bulls attempted to turn the tide during European action, but their efforts were not successful with the selling spilling into the U.S. session.
The Dow Jones Industrial Average declined 62.13 points, or 0.4%, to 16,370.96, with 25 of the 30 blue-chip companies on the index closing with losses. The Nasdaq Composite closed 16 points, or 0.3%, lower at 4,805.76. The S&P 500 fell 8.02 points, or 0.4%, to settle at 1,953.03, with nine of its 10 main sectors in negative territory. Materials and energy sectors led the losses, following a drop in oil prices, while shares of utilities, which benefit from a low-rate environment, were in positive territory.
Overall, the Monday affair was very quiet with many investors sticking to the sidelines ahead of Thursday's FOMC policy announcement, which could feature a fed funds rate hike. Fewer than 800 million shares changed hands at the NYSE floor.
The focus of the world marketplace this week is the Federal Open Market Committee meeting on Wednesday and Thursday, in which members will discuss monetary policy. A statement and press conference from Fed Chair Janet Yellen are set for Thursday afternoon. There is no consensus among traders and investors on whether the Fed will make an interest rate hike for the first time in several years at this week's meeting, or wait until December, or later. The U.S. Fed funds futures market presently suggests the Fed will not make a rate hike in September.
Asian stock markets were weaker on Monday, as there was more mostly downbeat economic data coming out of China. China's industrial output in August was up 6.1%, year-on-year, which was better than July's 6.0% growth, but lower than the consensus forecast of up 6.6% for August. Fixed asset investment in China during January-August was also lower than expected. However, China's retail sales in August were higher than expected. China's Shanghai stock index was down 2.7% Monday and Japan's Nikkei stock index was down 1.6% on the day. The U.S. Federal Open Market Committee meeting on Sept. 16-17 is expected to be the main theme for financial markets this week and any fluctuations in the dollar will also affect oil prices.
Among stocks under focus, Apple gained 1% following an upbeat story over the weekend in Barron's, which said the tech giant's shares may jump 50% on its new iPhone program. But Alibaba Group Holding shares fell 3.1% after a separate Barron's story warned the Chinese e-commerce giant's shares could fall 50%. Yahoo Inc. which owns a stake in Alibaba, was among the worst performers in the S&P 500, falling 3.5%.
It was mixed finish for bullions on Monday, 14 September 2015 at Comex. Gold futures settled higher Monday to recoup some of what they lost in the previous session, as investors set their sights on the crucial Federal Reserve decision on interest rates due out later this week. Gold for December delivery added $4.40, or 0.4%, to settle at $1,107.70 an ounce on Comex, after capping its third straight weekly loss on Friday. Prices lost 0.5% in the previous session. December silver fell 14.2 cents, or 1%, to $14.363 an ounce.
Crude oil futures settled at their lowest level in more than two weeks on Monday, 14 September 2015 as data showing weaker-than-expected industrial production in China and a decline for Shanghai's stock market raised concerns that demand for crude from the world's second-largest consumer will weaken. Traders also braced for more volatility and possibly lower oil prices in coming weeks. Goldman Sachs Group said last week that U.S. oil prices could fall to as low as $20 a barrel to clear out a global supply glut. October West Texas Intermediate crude settled at $44 a barrel, down 63 cents, or 1.4%, on the New York Mercantile Exchange.
Tomorrow, August Retail Sales (consensus 0.3%) and the September Empire Manufacturing Index (consensus 0.3) will be reported at 8:30 ET while August Industrial Production (consensus -0.2%) and Capacity Utilization (expected 77.8%) will cross the wires at 9:15 ET. The day's data will be topped off with the 10:00 ET release of the Business Inventories report for July (expected 0.1%).
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