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Dow off 100 points ahead of the Fed and a bout of earnings

Published 04/25/2016, 11:28 AM
© Reuters.  U.S. stocks drop ahead of the Fed and slew of quarterly reports
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Investing.com – U.S. stocks traded lower on Monday as investors prepared for the Federal Reserve’s (Fed) monetary policy decision on Wednesday and another bout of earnings throughout the week.

At 15:24GMT, or 13:24ET, the Dow Jones fell 105 points, or 0.58%, while the S&P 500 lost 10 points, or 0.48%, and the tech-heavy NASDAQ Composite traded down 19 points, or 0.38%.

No rate hike was expected to come when the Fed announces its monetary policy decision on Wednesday, though traders were gauging whether the U.S. central bank might provide a slightly more hawkish signal with the possibility of keeping a move at the following meeting in June on the table.

Most experts recommended keeping an eye on the Federal Open Market Committee’s statement and any changes to language that might suggest a change in the central bank’s outlook.

With market expectations “already very low”, Standard Chartered (LON:STAN) warned that “a hawkish surprise seems more likely than a dovish one.”

On a light calendar day, new home sales unexpectedly declined in March while the Dallas Fed manufacturing index also missed consensus after its 16th consecutive negative reading.

Meanwhile, the dollar was trading broadly lower. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, lost 0.45% at 94.68, at 15:26GMT, or 13:26ET.

Earnings continued to be a major focus of the markets as companies roll out first quarter reports as disappointing figures from Microsoft (NASDAQ:MSFT) or Google (NASDAQ:GOOGL) pulled techs down on Friday.

Among a slew of other earnings throughout the week, investors will look to the likes of Apple, Facebook, Twitter or Amazon.com to remove the bad taste left in investors’ mouths from tech reports last week.

All in all, reports have been mixed with 77% of the 132 S&P companies that had published so far beating on profit, above the long-term average of 63%, according to data from Thomson Reuters.

However, top-line has disappointed overall with only 58% of the same companies beating on revenue compared to the long-term average of 60%.

In Monday’s earnings, Xerox Corporation (NYSE:XRX) plunged almost 13% as it launched a profit warning after reporting disappointing numbers.

KKR & Co LP (NYSE:KKR) lost close to 4% after the private equity firm swung to a loss that was twice as large as analysts’ forecast.

Halliburton Company (NYSE:HAL) delayed its own report, originally scheduled for release on Monday, as the oilfield services firm worked on preparations for its merger with Baker Hughes.

Outside earnings, Perrigo Co (NYSE:PRGO) tumbled 13% as its chief executive officer left to join Valeant Pharmaceuticals International Inc (NYSE:VRX).

In positive stock news, Tribune Publishing Co (NYSE:TPUB) skyrocketed 57% after an acquisition offer from Gannett Co Inc (NYSE:GCI).

Additionally, oil showed choppy trade throughout the day on Monday as it wobbled back and forth between gains and losses.

However, black gold was back down in afternoon U.S. trade as investors took profits after an 8% rally last week added to the two prior weeks of gains.

In this context, U.S. crude futures fell 0.71% to $43.42 a barrel by 15:27GMT, or 13:27ET, while Brent oil traded down 0.09% to $45.03.

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