Wall Street slips on hawkish Fed, tepid earnings

Wall Street slips on hawkish Fed, tepid earnings

Wall Street slips on hawkish Fed, tepid earnings

"It feels as though the grand era of interest rates below 3 percent will soon be in the rear-view mirror", said Mike Terwilliger, portfolio manager of Resource Liquid Alternatives for the Resource Credit Income Fund in NY.

Oil majors Exxon and Chevron fell 5.8 percent and 4.3 percent, respectively, after reporting lower-than-expected quarterly profits.

Fast-rising wages could prompt more aggressive action from the central bank to keep a lid on inflation pressure.

SPX lost 1.83 points, or 0.06 percent, to 2,821.98 and the Nasdaq Composite . dropped 25.62 points, or 0.35 percent, to 7,385.86.

Feb 1 (Reuters) - U.S. stocks were lower in late morning trading on Thursday, following a string of lackluster earnings and after the Federal Reserve raised its inflation outlook for the year.

Equity traders around the world have been firing on all cylinders in recent months, sending markets to record or multi-year highs, on confidence in the global economy, healthy earnings and optimism over Donald Trump's tax cuts.

The CBOE Volatility Index, the most widely followed gauge for investors' fear of stock market volatility, rose to 14.39, after having fallen in the previous two sessions.

"This looks to me like an extension of the move we saw yesterday after the GDP print and also reflective of the defensive tone in the USA dollar overall", said Bipan Rai, executive director and senior macro strategist at CIBC Capital Markets.

Initial claims for unemployment benefits fell unexpectedly last week, indicating a tight labor market.

At 10:44 a.m. ET (1544 GMT), the Dow Jones Industrial Average was down 50.26 points, or 0.19 percent, at 26,099.13, the S&P 500 was down 2.77 points, or 0.09 percent, at 2,821.04.

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Labor Department reported employment grew more than expected in January with the biggest wage gain in more than 8-1/2 years. Technology companies accounted for much of the market's gain, outweighing losses in health care and other sectors.

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Analysts see fourth-quarter S&P 500 earnings growth of 14.9 per cent, up from 12 per cent expected on January 1.

Other major stock indexes fell about 2 percent Friday.

Among the stocks in the Dow, Apple fell 4.3 percent Friday, Exxon Mobil lost 5.1 percent, Chevron was down almost 6 percent and Goldman Sachs dropped 4.5 percent.

"The selloff is just letting steam out of the kettle", said Stephen Massocca, managing director at Wedbush Securities in San Francisco.

PayPal fell 7.2 percent after former parent eBay said it planned to move to a new primary payment processor. The company was the second-biggest percentage loser on the S&P 500. So far, of 227 companies that have reported, 79.7 per cent have come in above Street estimates.

High-profile tech companies reported after the closing bell.

But Shanghai closed up 0.4 per cent, Sydney rose 0.5 per cent and Wellington gained 0.4 per cent. Manila, Bangkok and Jakarta were also higher.

Declining issues outnumbered advancers on the NYSE by 1,636 to 1,138.

The S&P 500 posted 29 new 52-week highs and 9 new lows; the Nasdaq Composite recorded 82 new highs and 66 new lows.

Volume on US exchanges was 7.80 billion shares, above the 7.23 billion average for the full session over the last 20 trading days.

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