Global Stocks Drift Lower Ahead of Fed Decision
October 30 2019 - 8:19AM
Dow Jones News
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 4% in premarket trading
after the company raised its cash-flow outlook for the year.
Johnson & Johnson shares rose 3% off hours 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.
Stryker dropped 3.4% after mounting expenses led to a drop in
the medical-device maker's earnings. 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 on Wednesday from a raft
of major U.S. companies, including Apple, Facebook, Lyft and
Starbucks.
Meanwhile, the pan-continental Stoxx Europe 600 index was also
mostly flat, with some of the region's biggest banks posting
declines.
Shares of troubled German lender Deutsche Bank fell 6.7%, their
biggest drop since December, after it said efforts to overhaul its
global operations had taken a large chunk out of its revenue. Banco
Santander declined 4.3% 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 9% in Milan and PSA gained 6.2%. Rival Renault, which
had previously received an offer to combine its operations with
Fiat, slumped 4.2%.
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 FTSE 250 gauge slipped 0.3%, while the
yield on U.K. government bonds fell to 0.695%. Bond yields fall as
prices rise. The British pound ticked up 0.1%.
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 08:04 ET (12:04 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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