US Stock Market Lower on Weak Earnings Ahead of FOMC

Wall Street posted modest losses Monday, eroding some of last week’s gains, as investors opted to stay on the sidelines ahead of meetings from the Bank of Japan and Federal Reserve later in the week.

Oil prices also vacillated between  small gains and losses.

The Dow Jones Industrial Average dropped 90 points, or 0.5%, to 17,913, as United Technologies Corp.  and Chevron Corp.  emerged as the biggest decliners.

Meanwhile, the S&P 500  lost 9 points, or 0.4%, to 2,083

The Nasdaq Composite lost 13 points, or 0.3%, to 4,893.

Central bank policy is likely to be a prominent theme this week. Signs of rising inflation in the U.S. might influence the Fed to adopt slightly more hawkish language in its monetary policy statement, which is expected to be released after the close of the meeting on Wednesday.

“People will be keen to see if there’s a switch in tone from the recent more dovish comments,” said Oliver Pursche, chief executive officer at Bruderman Brothers. “I would not be surprised if you saw something like ‘we’re holding off because of stuff that’s going on internationally but the U.S. economy is ready for a hike.”

The Fed—which raised interest rates in December for the first time in nearly a decade—is widely expected to leave rates unchanged. A major question for investors right now is whether the Fed is on course to raise interest rates again this year and, if so, how many times in 2016 rates are likely to go up.

via MarketWatch

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza