Global equity markets retreated on Tuesday as investors showed restraint in advance of earnings from Apple and a US Federal Reserve policy statement, while crude prices slumped to multi-week lows on worries about oversupply.
The S&P 500 was on track for a second straight decline as investors awaited Apple earnings after the closing bell in an effort to gauge global demand. Investors were also bracing for the conclusion of the Fed’s two-day meeting on Wednesday for signs on the timing of an interest rate hike.
“You’ve got Apple and the Fed in front of you, are you going to make a big bet,” said Art Hogan, chief market strategist at Wunderlich Securities in New York. “Considering the kind of move we’ve made, when you look at October it’s been a pretty positive month, so for us to dribble some of that out is a whole lot better than retracing a move in two days, and that is what it going on,” he said.
Prior to declines this week, the benchmark index had rallied more than 10% from the end of September.
European shares fell following a profit warning from BASF. The world’s largest chemicals firm blamed struggling emerging markets like China and Brazil.
The Dow Jones industrial average fell 53.52 points, or 0.3%, to 17,569.53, the S&P 500 lost 11.42 points, or 0.55%, to 2,059.76 and the Nasdaq Composite dropped 24.22 points, or 0.48%, to 5,010.49.
MSCI’s all-country world index of the equity performance of 46 countries lost 0.69%, while the pan-regional FTSEurofirst 300 index, tracking Europe’s 300 largest companies, closed down 1%. Markets are pricing in only around a 7% chance the US central bank will raise rates this week and many market participants believe the Fed will hold off until 2016, but investors will be watching for signals the central bank might act at its next meeting in December.
Apple on deck
Apple was unchanged at $115.28 ahead of its results, with investors anxious to hear how many new phones it has been selling after supplier Manz cut its guidance.
Alibaba shares climbed 3% to $78.64 after the China-focused e-commerce giant reported better than expected revenue.
But BASF, whose products range from car coatings to mining acids, blamed the pressures facing major emerging markets like China and Brazil for the profit warning that knocked its shares 5% lower.
Prices of 10-year Treasuries were up 10/32 to yield 2.0228% after a drop in durable goods orders for September was the latest data point to indicate the economy slowed in the third quarter.
Oil prices fell for a third straight day, with Brent touching a six-week low, as worries over persistent oversupply grew ahead of US data that was expected to show another increase in crude inventories. Brent crude was down 1.9% to $46.66 a barrel while US crude was off 2.3% at $42.96.
Against a basket of currencies, the dollar was up 0.07% at 96.915. The greenback had briefly dippe
