US stocks were sluggish on Wednesday ahead of the Fed’s announcement on interest rates, with the Nasdaq being weighed on by Facebook.
The Dow Jones Industrial Average dropped 0.1% while the S&P dropped 0.2%. The Nasdaq Composite Index is 0.6% lower.
Quantitative easing, the policy experiment from the Federal Reserve, hatched during the financial crisis, is expected to be closed by the Fed as it concludes its two-day meeting.
Facebook is dropping on its earnings news with its shares down by around 6%, as reported by USA Today.
Hershey, chocolate maker, posted Q3 results that were below estimates and cut its outlook for the year. US Steel surged after it posted quarterly results that were better than expected.
Whitebox Mutual Funds senior portfolio manager, Paul Karos said, “Generally this is why the markets have come back firmly is because earnings season has gone quite well. The fear was with Europe, China and Latin America slowing down that we’d see a lot of downward revisions. We saw some, but in general did not happen.”
According to CNBC, 287 companies in the S&P 500 have reported Q3 earnings; with 75.3% of them having beaten estimates.
Mark Luschini, Janney Montgomery Scott chief investment strategist said, “The market is positively biased at the moment, that’s been the direction since we hit the nadir here from a few weeks ago. But I don’t think we’ll go in a particularly exaggerated fashion in advance of the Fed release.”
He added, “The bar is sufficiently high for the Fed to continue QE, so I expect it to end.”
The language of the Fed will be scrutinized for the hints as to when the Fed would increase the interest rates, and whether the Fed is usually concerned about the slowing global economy that would impact the US growth.
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