Wall Street has been mixed, with technology shares dipping before Apple’s quarterly report while a rebound in 3M and other industrials elevated the Dow Jones Industrial Average. Apple declined 1.04 per cent on Tuesday as investors awaited the iPhone maker’s results after the bell following its warning earlier this month about soft demand in China, whose economy has been damaged by a trade war with the US.
Interest rates were in focus as the Federal Reserve began a two-day monetary policy meeting. After raising rates gradually last year, the central bank is taking a wait-and-see approach to further tightening in the face of an overseas slowdown and market volatility. The Fed is widely expected to leave rates unchanged on Wednesday and investors will look to Friday’s January jobs report for clues about the pace of future inflation.
The S&P industrials index, which took a beating after a warning from Caterpillar on Monday, rebounded 1.74 per cent, helped by better-than-expected reports from 3M Co and defence companies. Amazon.com, Facebook and Microsoft Corp, all part of a wave of quarterly reports later this week, fell more than two per cent each. The S&P technology index lost 1.01 per cent.
Analysts on average expect S&P 500 companies’ aggregate earnings per share to have risen 14.2 per cent in the fourth quarter. But with US corporate tax cuts now a year old, 2019 earnings are seen rising a more moderate 5.6 per cent. As Washington and Beijing officials prepare for a high-level trade meeting this week, the Justice Department levelled charges against Chinese telecom giant Huawei, potentially casting a cloud on the talks.
The Dow Jones Industrial Average climbed 0.21 per cent to end at 24,579.96 points, while the S&P 500 lost 0.15 per cent to 2,640, dragged down by technology and communications stocks. The Nasdaq Composite dropped 0.81 per cent to 7,028.29.
Morning-Market-Note-Wednesday-30th-January