Global Stocks Drift Lower Ahead of Fed Decision

By Will Horner

Global stocks edged lower amid disappointing earnings Wednesday as investors awaited the Federal Reserve's decision on interest rates.

Stock futures linked to the Dow Jones Industrial Average were largely flat. General Electric jumped over 5% in premarket trading after the company's third-quarter profit beat Wall Street's expectations.

Johnson & Johnson shares rose 3% offhours after it said Tuesday that a test of its baby powder didn't find traces of asbestos, rebutting U.S. regulators' claims about the product.

Advanced Micro Devices fell 2.2%. The chip maker issued a forecast for the current quarter late Tuesday that was slightly lower than expected.

Investors are awaiting earnings later Wednesday from a raft of major U.S. companies, including Apple, Facebook, Lyft and Starbucks.

Meanwhile, the pan-continental Stoxx Europe 600 index ticked down 0.2%, with some of the region's biggest banks leading declines.

Shares of troubled German lender Deutsche Bank fell 5.8%, making it the worst performer in Europe, after it said efforts to overhaul its global operations had taken a large chunk out of its revenue. Banco Santander declined 3% as third-quarter profit fell 75%.

Fiat Chrysler Automobiles and Peugeot maker PSA Group surged after the companies confirmed they were discussing a merger that would create the world's fourth-largest auto maker by volume. Fiat shares rose 8.3% in Milan and PSA gained 5.9%. Rival Renault, which had previously received an offer to combine its operations with Fiat, slumped 3.5%.

In the U.K., major stock indexes slipped after lawmakers agreed to hold an early election on Dec. 12 in an attempt to break the stalemate over Brexit. The nation's blue-chip FTSE 100 gauge slipped 0.1%, while the yield on U.K. government bonds fell to 0.694%. Bond yields fall as prices rise.

Investors are largely holding off from making major moves until the conclusion of the Fed's monetary policy meeting later in the day, said Daniel Lacalle, chief economist and chief investment officer at Madrid-based investment firm Tressis.

"With the two main negative catalysts in the mind of market participants -- Brexit and the U.S.-China trade war -- having been not resolved, but at least showing some light at the end of the tunnel, then monetary policy becomes the key factor," he said.

The central bank is widely expected to cut interest rates by a quarter of a percentage point after markets close. Key data, including the first reading of U.S. third-quarter gross domestic product and a gauge of private-sector employment, will also give investors and policy makers additional clues on the state of the economy.

In Asia, the Shanghai Composite Index fell 0.5%, while Japan's Nikkei 225 gauge dropped 0.6%.

(END) Dow Jones Newswires

October 30, 2019 06:52 ET (10:52 GMT)

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