Stocks Dip Ahead of Fed News; Oil Prices Drop

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Bargain hunting is likely to contribute to initial strength on Wall Street, with traders picking up stocks at reduced levels on the heels of the sharp drops seen Friday and Monday.

Wall Street's major indexes all slid more than 2 percent on Monday, with the benchmark S&P 500 closing at its lowest in 14 months, on concerns about slowing economic growth ahead of a highly anticipated decision from the Federal Reserve this week on the course of US interest-rate hikes.

The S&P 500 had risen as much as 1.1 percent earlier in the session but gave up most of its gains after U.S. Senate Majority Leader Mitch McConnell said Democrats had rejected his spending bill proposal.

The Dow lost 507 points, or 2.1 percent, to 23,592. The Nasdaq composite gained 30.18 points, or 0.4 percent, to 6,783.91. Energy stocks plummeted along with crude oil, which reached its lowest price since August 2017.

The sharply lower close on Wall Street came amid lingering concerns about global economic growth as well as continued uncertainty about trade between the US and China.

Health insurers and hospitals are falling Monday after a judge in Texas ruled that the 2010 Affordable Care Act is unconstitutional.

Analysts are also watching for Wednesday's Fed decision, which comes amid intense pressure from President Donald Trump on the U.S. central bank to keep rates low.

Contracts on the S&P 500 Index expiring in March climbed as much as 0.7 percent after the equity gauge closed little changed on Tuesday.

The Dow has suffered a series of punishing drops on nagging fears of slowing global growth, unresolved trade worries and the pace of the Federal Reserve's rate increases, with Monday's action threatening to place the Dow at its lowest closing level of 2018 at 24,100.51. The Dow Jones Industrial Average was also off 2.1% and the Nasdaq, down 2.3%.

Japan's Nikkei 225 index fell 0.4 percent to 21,025.10 while South Korea's Kospi rose 0.6 percent to 2,074.38.

The Nasdaq is down 119.48 points, or 1.7 percent.

Health care stocks are leading major US indexes lower in early trading on Wall Street after a federal judge ruled that the 2010 Affordable Care Act is unconstitutional.

Energy stocks including Exxon Mobil fell again on Tuesday, but some of those losses were offset by gains in Apple, Amazon, Microsoft and Boeing. J&J shares ended 2.9 percent lower. After several weeks of declines the benchmark index is trading at its lowest level of the year.

In other commodities trading, wholesale gasoline fell 4.2 percent to $1.35 a gallon and heating oil lost 4 percent to $1.75 a gallon. For stock markets, battered recently by a series of concerns notably related to mounting trade tensions between the USA and China, any such hint could help sentiment improve coming into the year's end.