US stocks drifted lower throughout the morning session, with investors loath to make a move ahead of the outcome of the Fed’s policy meeting.
The Federal Open Market Committee (FOMC) is set to make an announcement on interest rates tomorrow, and although the Fed’s policy makers are widely expected to hold off on a rate rise until next year, there will still be plenty of rune reading and semantic studies going on when the Fed releases its statement tomorrow.
“Major numbers from the US … did not live up to expectations, with durable goods and consumer confidence both falling short; most investors would be inclined to agree the environment does not yet seem right for an increase in US interest rates, an idea Janet Yellen seems in no hurry to dispel. A potentially significant Bank of Japan meeting at the end of the week only adds to the sense that now is not the time to add to positions, but rather to trim and await developments,” suggested Chris Beauchamp at spread betting firm IG.
All three of the major benchmarks were in the red this, with the Dow Jones down 0.3% (52 points) at 17,571, the S&P 500 off 0.5% (10 points) at 2,061 and the Nasdaq Composite 0.4% lower (21 points) at 5,013.
On the economic front, durable goods orders fell for the second month in succession in September, dipping a seasonally adjusted 1.2% after falling 3% in August.
Oil stocks were under pressure as the price of crude retreated further, with West Texas Intermediate for November delivery down 2.5%, or US$1.10, at US$42.88 a barrel.
Leading the sector lower was Consol Energy (NYSE:CNX), down 19%, after third quarter results demonstrated the effects of the softness of the oil price.
The fuel producer posted an adjusted loss per share of 28 cents, versus market expectations of a two cent loss per share. Revenue tumbled from US$885mln last year to US$814mln. The company said it made a loss of 28 cents on every thousand cubic feet of gas it produced during the quarter.
Sector peers Chesapeake Energy, down 7.7%, Anadarko Petroleum (NYSE:APC, down 5.3%, and Devon Energy, down 5.1%, also suffered heavy falls.
Offsetting these losses were handbags maker Coach (NYSE:COH) and drugs firm Pfizer (NYSE:PFE), after well-received updates.
Coach climbed 4.5% to US$31.68 as it said revenue in the three months to the end of September were virtually unchanged from a year ago, suggesting the downward trajectory of the top line has come to a halt.
Pfizer lifted its guidance for 2015 after an impressive third quarter. Shares advanced 2.2% to US$34.92 after the company’s underlying earnings per share of 60 cents topped the consensus forecast of 51 cents.