US stocks closed lower on Monday following declining oil and weighed by disappointing corporate reports. The dollar weakened as investors adjusted their positions ahead of Federal Reserve policy meeting starting today. The live dollar index data indicate the ICE US Dollar Index, a measure of the dollar’s value against a basket of six major currencies, slipped 0.3% to 94.79. It is widely expected the Federal Reserve will not make a change in policy after the end of the two-day meeting on Wednesday. According to CME Group’s FedWatch tool, federal funds futures traders are pricing in a 0% probability of an interest rate increase in April and a 23% probability of a rate increase in June. Investors will be watching for clues whether the Fed is still on course to raise interest rates again this year and how many times in 2016 rates are likely to go up.
The Dow Jones Industrial Average closed 0.15% lower at 17977.24. The S&P 500 ended 0.2% lower at 2087.79, led by a 1.1% decline in energy sector. The Nasdaq Composite lost 0.2%. Xerox (NYSE:XRX) shares tumbled 13.3%, the sharpest one-day drop since September 2009, after the printer and copier maker reported lower revenue. Perrigo (NYSE:PRGO) shares sank 16.3% after the company lowered its outlook. Tribune Publishing (NYSE:TPUB) shares soared 53% after Gannett offered to buy the owner of the Los Angeles Times in a deal valued at $815 million.
In economic data, new home sales declined by 1.5% in March but, on positive note, the February’s reading was revised upward. Apple (NASDAQ:AAPL), AT&T (NYSE:T), Procter & Gamble (NYSE:PG), 3M Company (NYSE:MMM), Eli Lilly (NYSE:LLY), DuPont (NYSE:DD) and eBay (NASDAQ:EBAY) will be reporting today. Apple is expected to report its first year-over-year decline in iPhone unit sales. So far 59% of the 135 companies that have already announced quarterly earnings reported revenues above analyst expectations, just short of the average of 60% in 2002. Today at 14:30 CET preliminary March Durable Goods Orders will be released in US. The tentative outlook is positive for the dollar. At 15:00 CET February Case-Shiller Home Price Index will be published. The tentative outlook is negative. At 15:45 CET April preliminary Services PMI will be released. The tentative outlook is positive.
European stocks ended lower on Monday as falling oil prices weighed on materials and energy shares. The euro strengthened, rising to $1.1268 late Monday in New York compared with $1.1233 late Friday. The Stoxx Europe 600 closed down 0.5%. Germany's DAX 30 lost 0.8% to 10294.35 after the Ifo Institute business climate index fell unexpectedly to 106.6 in April instead of a forecast of 107.0. Volkswagen (DE:VOWG_p) fell 1.9% and Daimler AG (DE:DAIGn) slipped 0.7%. France’s CAC 40 fell 0.5%, the UK’s FTSE 100 ended 0.8% lower. Today at 10:30 CET January Loans for House Purchases will be released by British Banker’s Association in UK. The tentative outlook is positive for pound. No important economic data are expected today in eurozone.
Nikkei fell 0.5% today as yen strengthened against the dollar on uncertainty about whether the Bank of Japan will adopt sufficient stimulus measures at its April 27-28 policy meeting. Stronger yen hit exporter stocks, with Panasonic (T:6752) losing 1.4% while auto exporters Toyota Motor (T:7203) and Nissan Motor (T:7201) closing down 0.7% and 1% respectively.
Oil futures prices are falling today on expectations of higher crude output as Saudi Arabia and Iran compete for market share. June West Texas Intermediate crude fell 2.5% to $42.64 a barrel on the New York Mercantile Exchange on Monday. Traders note absence of any significant improvement in oil market fundamentals after oil prices rose by nearly 5% last week as Kuwait’s crude oil output fell due to a three-day strike.