Wall St lower as investors assess Fed's hawkish stance

Andrew Cummings
September 21, 2017

The benchmark S&P/ASX 200 index fell by 53.70 points or 0.9% to 5,655.40, extending losses for the third straight session and closing at its lowest level in over seven months. The country's GDP expanded 0.8% sequentially in the three months to the end of June, Statistics New Zealand figures showed today, matching expectations and up from a revised 0.6% the previous quarter.

Woodside Petroleum and Santos surged around 2% after oil prices settled 2% higher overnight.

The Dow Jones Industrial Average climbed for a sixth consecutive session, hitting another record high, while the S&P 500 touched the 2,500 benchmark in its own run to an all-time peak, shrugging off geopolitical uncertainties and downbeat US data on gains in telecommunications and financials.

U.S. stocks and the dollar were steady on Wednesday with investors cautious ahead of a U.S. Federal Reserve statement that may give clues on whether the central bank will raise interest rates for a third time this year.

While the Fed is expected to hold rates steady, investors are keen to see the Fed's economic projections and any other signals on whether a rate increase in December is likely.

Easing geopolitical concerns and steady global growth have encouraged investors to keep lifting stocks higher in recent sessions, with the gains Tuesday fueled by telecommunications and financial companies.

Technology companies were among the biggest decliners. The S&P 500 added 2.78 points, or 0.1% to 2506.65, and the Nasdaq Composite rose 6.68 points, or 0.1%, to 6461.32. Oil prices were on course for their largest third-quarter gain in 13 years, with the USA crude settling at $50.41 a barrel, up 1.9 per cent.

Among stocks, Tesla was down 1.35 percent in premarket trading after Jefferies started coverage of the electric vehicle maker's stock with "underperform".

Bond prices fell Tuesday, sending the yield on the 10-year Treasury note up to 2.24 percent from 2.23 percent late Monday.

Traders were betting on a 56.4% chance of a December hike, compared with 46.8% a week ago, according to the CME Group 's FedWatch tool.

U.S. stocks have continued to climb this year, with the S&P up about 12 percent so far, helped by strong corporate profits and optimism that U.S. President Donald Trump will cut business taxes.

"The most important thing Yellen needed to communicate to the market was that the bond sale plan and rate increases are not on autopilot", said Jason Pride, director of investment strategy at Glenmede in Philadelphia.

"That's the most important aspect here", Blancato said.

The blue-chip slipped 6 points, or 0.03% by 7:07AM ET (11:0GMT), the dropped 1 point, or 0.05%, while the tech-heavy edged forward 3 points, or 0.05%. The Shanghai Composite slid 0.08% and the Shenzhen Composite inched lower by 0.04%.

Advancing issues outnumbered declining ones on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.30-to-1 ratio favored advancers.

Currently, the major averages are on opposite sides of the unchanged line.

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