USA stocks flat ahead of Fed meeting

The Dow and S&P 500 finished lower Monday as petroleum-linked stocks tumbled ahead of earnings this week from ExxonMobil and Chevron. The Federal Reserve’s two-day policy meeting starts tomorrow, and the FOMC will release its interest-rate decision on Wednesday. Economists surveyed by The Wall Street Journal had expected overall orders to drop by 1.5 per cent in September.

Central bankers in Europe and China last week signalled commitment to bolstering their economies, which helped the Standard & Poor’s 500 Index erase a loss for the year.

Eight of the 10 major S&P sectors were down, with the energy sector’s 2.2 per cent fall leading the decliners. Separately, a Conference Board report showed its consumer sentiment index dropped to 97.6 in October, down from 102.6 in September. CEO Nick Fanandakis said the company is “not pleased” with its results.

Drug giants Merck (MRK) and Pfizer (PFE) also reported better than expected third quarter earnings and provided upbeat full-year guidance.

Xerox’s shares were up 1.4 percent at $10.48 in premarket trading on Monday after it reported results and said it would review its operations.

The S&P 500 and the Dow Jones industrial average lost 0.3% and 0.2%, respectively.

Pep Boys-Manny Moe and Jack (PBY) surged 23.4% or $2.84 to $14.99 after the automobile components retailer agreed to be acquired by Japan-based Bridgestone Americas Inc. for $15 per share in cash or about $835 million, a premium of 23% over the closing price Friday.

Significant weakness also remains visible among energy stocks, which are moving lower along with the price of crude oil. Crude for December delivery is now sliding USD0.90 to USD43.08 a barrel.

Tokyo closed up 0.65 per cent, having been more than one per cent higher at one point.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Tuesday. The UK’s FTSE 100 Index dropped 0.8%, while France’s CAC 40 Index and Germany’s DAX Index each decreased 1%.

Meanwhile, the major European markets have all moved to the downside on the day. It’s now up a whopping 0.8%.

US Treasuries rose on the back of expectations the Fed will hold off on a rate hike amid concern about worldwide economic growth, pushing yields on the 10-year note two basis points lower to 2.07 percent. Exxon Mobil (XOM – Get Report), Chevron (CVX – Get Report), ConocoPhillips (COP – Get Report), Royal Dutch Shell (RDS.A – Get Report), Total (TOT – Get Report), and PetroChina (PTR) moved lower, while the Energy Select Sector SPDR ETF (XLE) fell 1.6%.