Stocks Dip Ahead of Fed Decision, Apple and Facebook Earnings


Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average was slipping as Wall Street awaits an expected rate cut – the third this year – from the Federal Reserve on Wednesday and earnings from Apple (AAPLGet Report) .
  • Advanced Micro Devices (AMDGet Report) fell after the semiconductor maker posted revenue that slightly missed estimates, in-line earnings and mixed guidance. AMD is Real Money’s Stock of the Day.
  • General Electric (GEGet Report) climbed after beating analysts’ third-quarter earnings forecasts.

Wall Street Overview

Stocks were falling as Wall Street awaits an expected rate cut – the third this year – from the Federal Reserve on Wednesday and earnings from Apple (AAPLGet Report) .

The Dow Jones Industrial Average fell 6 points, or 0.02%, to 27,039. The S&P 500, which set another intraday record high on Tuesday, was down 0.07% to 3,034.75, while the Nasdaq was off 0.06%.

Investors widely expect policymakers on the Federal Open Market Committee to vote to cut the fed funds target rate by another 25 basis points to a range of between 1.5% and 1.75% as an ongoing global manufacturing downturn prompts other central banks – most notably the European Central Bank and the Bank of Japan – to keep their own rates low.

“Futures markets suggest that while a Fed rate cut today is all but assured, the odds of another in December is a coin toss,” said Alec Young, managing director of global markets research, FTSE Russell. “The Fed’s investor-friendly mid-cycle dovish pivot could be over as three rate cuts have now largely offset many global risks.”

The Fed will announce its decision on interest rates at 2 p.m. ET, and Fed Chairman Jerome Powell will hold a press conference at 2:30 p.m.

In economic news, private U.S. employers added 125,000 jobs during October, according to a report from payroll company Automatic Data Processing, matching economists’ forecasts. The official U.S. jobs report for October will be released Friday.

U.S. gross domestic product grew at an annualized rate of 1.9% in the third quarter, the Commerce Department said, down slightly from 2% in the second quarter. Economists were expecting a rate of 1.6%.

“The first read of Q3 Real GDP showed an economy growing at a modest pace, right in-line with expectations at an annual rate of 1.9% and only slightly below last month’s 2.0%,” said Michael Reynolds, investment strategy officer at Glenmede. “Two percent growth is certainly nothing to get too excited about – it constitutes further evidence that the U.S. economy is not entirely insulated from the global manufacturing slowdown, though it’s not entirely exposed either. Overall, this quarter’s results suggest that recession fears may have been overblown, and the U.S. economy is simply going through another growth scare, akin to late 2015, early 2016.”

Chilean President Sebastian Pinera said the country won’t host the Asia-Pacific Economic Cooperation summit scheduled for next month following a wave of protests and riots. Pinera also canceled the COP25 environmental conference set for December.

The U.S. and China were looking to sign “phase one” of the trade agreement between the world’s largest economies at the summit, but Reuters reported Tuesday that the two sides might not reach an agreement by that time.

U.S. President Donald Trump‘s demand that Beijing commit to big purchases of American farm products has become a major sticking point in talks to end the ongoing trade war, Reuters reported, cited people briefed on the negotiations.

Advanced Micro Devices (AMDGet Report) fell 1.8% to $32.47 after the semiconductor maker posted revenue that slightly missed estimates, inline earnings and mixed guidance. Advanced Micro Devices is Real Money’s Stock of the Day.

General Electric (GEGet Report) climbed 14.1% to $10.35 after the industrial company posted third-quarter adjusted earnings that beat analysts’ forecasts.

Yum! Brands (YUMGet Report) fell 10.2% to $98.51 after the parent company of KFC, Pizza Hut and Taco Bell, missed Wall Street’s third-quarter earnings expectations.

Fiat Chrysler ( FCAUGet Report) rose slightly to $14.29 after a report that the Italian-U.S. automaker is in merger talks with French automaker PSA Group ( PUGOY) , which owns Peugeot and Citroen.

Apple and Facebook (FBGet Report) are scheduled to report earnings after the closing bell Wednesday.

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