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Wall Street ends strong month on weaker note; focus on Fed meeting

Economy Oct 31, 2022 07:26PM ET
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© Reuters. FILE PHOTO: A Wall Street sign outside the New York Stock Exchange in New York City, New York, U.S., October 2, 2020. REUTERS/Carlo Allegri
 
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By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks lost ground on Monday, with the major indexes closing out a strong month of gains on a weaker foot, as investor focus turned to the Federal Reserve's policy meeting this week.

The central bank is widely expected to raise interest rates by 75 basis points on Wednesday at the conclusion of its two-day policy meeting, but investors will look for any signals the Fed may be considering a deceleration in interest rate hikes in the future.

Hopes the Fed may pull back from its aggressive interest rate hike policy have lifted equities in recent weeks, with the S&P 500 notching a gain of nearly 9% over the past two weeks. The Dow booked its biggest monthly percentage gain since January 1976 and biggest October percentage gain since at least 1900.

Comments from Fed officials after the policy decision as well as labor market data later this week will help shape market expectations for future hikes starting at the December meeting.

"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 (NYSE:SCHW) 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."

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%.

  Apple Inc (NASDAQ:AAPL) 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 (NASDAQ:AMZN) and Google-owner Alphabet (NASDAQ:GOOGL) which have been under pressure in the rising rate environment, were also lower, down 0.94% and 1.85%, respectively.

Nearly all 11 S&P 500 sectors fell, with technology and communication services the worst performers with declines of more than 1%. Energy was the sole advancer ahead of remarks on oil companies by U.S. President Joe Biden later on Monday.

Energy companies such as Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM) handily beaten profit estimates this quarter, benefiting from surging energy prices, in contrast to Big Tech firms that have largely disappointed investors.

"Dividend stocks, energy, stuff that is short duration, industrials ... that is what is working," said Eric Diton, president and managing director at The Wealth Alliance in Boca Raton, Florida.

With around half of the companies in the S&P 500 having reported their quarterly results so far, third-quarter earnings growth estimates stands at 4%, according to Refintiv data, slightly lower than the 4.1% last week.

Global Payments (NYSE:GPN) Inc slumped 8.82% after the company forecast full-year revenue below estimates.

Volume on U.S. exchanges was 11.53 billion shares, compared with the 11.52 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 1.29-to-1 ratio; on Nasdaq, a 1.22-to-1 ratio favored decliners.

The S&P 500 posted 24 new 52-week highs and 8 new lows; the Nasdaq Composite recorded 137 new highs and 113 new lows.

Wall Street ends strong month on weaker note; focus on Fed meeting
 

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Comments (20)
Larwanauillia Illia
Larwanauillia Illia Nov 07, 2022 2:18PM ET
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larwanauillia
Kerry Ditto
Kerry Ditto Oct 31, 2022 7:53PM ET
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the stock with 70 p/e, 900% gain in 5 years is tsla. ridiculous
Kerry Ditto
Kerry Ditto Oct 31, 2022 7:01PM ET
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Electric cars seem not going to replace gasoline cars. EV things seem overblown hot air.
Kerry Ditto
Kerry Ditto Oct 31, 2022 6:38PM ET
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No one knows what is exactly going. God only would know. Mostly things are at the mercy or whim of big money powers.
Dylan Thomas
Dylan Thomas Oct 31, 2022 6:38PM ET
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Kerry Ditto
Kerry Ditto Oct 31, 2022 4:21PM ET
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Massive stock market crash is highly likely. Maybe around mid-term election.
Robert Linkesch
Robert Linkesch Oct 31, 2022 2:35PM ET
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strong 💪 USD ✌️
Stephen Fa
Stephen Fa Oct 31, 2022 2:17PM ET
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Focus shifts to the reality of B1denflation.
Mitchel Pioneer
Mitchel Pioneer Oct 31, 2022 1:04PM ET
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Laughingstock of the investing world on full display once again.
Martin Babei
Martin Babei Oct 31, 2022 12:10PM ET
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Boy oh boy are we all in for a suprice. Inflation heading higher rather than lover. PPI of the charts. What will the fed do. The fed has never been so clare and yet we all wonder what they will do and say. Well, here is what they will do and say. 100 basispoints. Explanation: the feds actions up till now have not had the desired effect on inflation. Job reports high enough to warrant a 100 basispoints raise in interest rates. What else should they do? Let inflation run wild so everyone can get their pitchforks out?
Martin Babei
Martin Babei Oct 31, 2022 12:10PM ET
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This market it totally unhinged
First Last
First Last Oct 31, 2022 12:10PM ET
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The Fed isn't who you should look to to solve the Russian problem.
 
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