Wall Street is lower on worries ahead of earnings, according to Fed minutes
- Summary of the following items:
- American Airlines is picking up on its disappointing Q3 result forecast after a disappointing third quarter for the airline.
- Tesla rises on September's record sales of Chinese-made cars, surpassing the previous record.
- Fed Minutes, CPI data expected Wednesday, and CBOE minutes are expected.
- Dow 0.34%, S&P 500 0.24% and Nasdaq 0.14% indexes down
U.S. stocks dropped on Tuesday, extending losses late as investors became more anxious in the lead up to third-quarter earnings, while a rise in Tesla shares boosted the market.
The Federal Reserve is expected to release minutes of its last policy meeting on Wednesday, which market participants will examine for clues on when the United States central bank may begin to reduce its massive bond-buying program.
All three major U.S. stock indexes ended in the red, with the Dow down the most, followed by healthcare (.SPXHC) and industrials (. SPLRCI).
Earnings will unofficially begin this week with results from JPMorgan Chase & Co (JPM.N) on Wednesday, and other banks to follow. JPMorgan's shares fell 0.8% on the day, while the S&P 500 banks index (.SPXBK) edged down 0.6%.
Analysts predict a strong U.S. profit increase for the third quarter. However, a number of businesses have warned of potential risks, and investors are concerned about how supply chain problems and higher prices will impact businesses recovering from the coronavirus epidemic.
"For the most part, institutional portfolio managers are of the opinion that let's see what earnings look like and how much of a negative impact is being seen from shortages, higher interest rates, and supply chain bottlenecks," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
"A lot of those factors are now reflected in where equity prices are."
The Dow Jones Industrial Average (.DJI) dropped 117.72 points, or 0.34%, to 34,378.34, the S&P 500 (ASPX) lost 10.54 points (or 0.24%), to 4,350.65, and the Nasdaq Composite ('IXIC') declined 20.28 points (0.14%) to 14,465.93.
Six of the 11 major sectors of NYSE 500 ended the session in the red, with communications services (.SPLRCL) experiencing the highest percentage loss.
After data showed the electric vehicle maker sold 56,006 China-made vehicles in September, the highest since it began production in Shanghai about two years ago, Tesla (TSLA.O) advanced 1.7%. The company's shares were the biggest boost to the S&P 500 and the Nasdaq. Read more
Shares of American Airlines Group (AAL.O) rose 0.8% after the business reported a smaller-than-expected adjusted loss for the third quarter and indicated better bookings for much of the year.
MGM Resorts (MGM.N) gained 9.6% after Credit Suisse upgraded the stock to "outperform" from "neutral."
After Goldman Sachs initiated coverage with a "buy" recommendation, Nike Inc (NKE.N) gained 2.0 percent.
Investors also weighed in on comments from Fed Vice Chair Richard Clarida, who claimed the central bank has all but met its employment target for reducing its bond buying program.
The labor market remained tight, with a record number of Americans quitting their jobs and job vacancies totaling more than 10 million, stifling inflation fears as firms raise wages to attract and retain workers.
Investors who are searching for clues on inflation will be attracted to Wednesday's consumer price index report.
On the NYSE, advancers outnumbered declining ones by a 1.38-to-1 ratio, while on Nasdaq, 1.32-to--1 advanceors were favoured.
The S&P 500 recorded 10 new 52-week highs and 10 brand-new lows; the Nasdaq Composite recorded 46 new high high levels and 94 brand new low low levels.
Volume on U.S. exchanges was 9.17 billion shares, compared to the 10.80 billion average over the last 20 trading days.