Dow off triple digits as Boeing, Apple weigh; Street awaits Fed statement

U.S. stocks traded lower Wednesday as some disappointing quarterly reports weighed ahead of the afternoon Fed statement release.

Both Apple and Boeing declined sharply to send the Dow Jones industrial average more than 150 points lower in morning trade. The two stocks were the greatest weights on the Dow, accounting for more than 110 points off the index, while United Technologies and 3Mcontributed the most to gains.

Boeing held about 9 percent lower in morning trade, on pace for its worst daily loss in more than a decade. The firm’s full-year guidance was below expectations, although the jetmaker reported earnings that beat on both the top and bottom line.

Oil struggled for gains near $31 a barrel after weekly inventories showed a build of 8.4 million barrels, versus a rise of 4.0 million barrels last week, according to StreetAccount.

Shares of Apple fell more than 5 percent in morning trade after the iPhone maker reported fewer-than-expected unit sales of its flagship product, for the lowest growth in shipments since the iPhone was launched in 2007. Apple also forecast its first revenue drop in 13 years, citing some softness in the critical Chinese market, Reuters reported.

“It’s weighing on stocks more broadly given its size and dominance,” said Jack Ablin, chief investment officer at BMO Private Bank.

The Nasdaq composite fell more than 1 percent in morning trade, as Apple declined and the iShares Nasdaq Biotechnology ETF (IBB)turned lower after briefly spiking 1 percent in opening trade.

The Dow transports briefly gained more than 1 percent in morning trade as United Continental led advancers.

United Technologies, maker of Pratt & Whitney aircraft engines and Otis elevators, reaffirmed guidance but reported a 4.5 percent decline in fourth-quarter revenue as a strong dollar weighed.

Read More: Why the Fed could jolt markets

The Federal Open Market Committee is scheduled to release its meeting statement at 2 p.m. ET as it concludes its two-day meeting.

“If the (statement is) somewhat dovish I think the market will actually move higher,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab, citing the gains in stocks after ECB President Mario Draghi’s comments last week raised hopes of further stimulus in the euro zone.

“I find it a little disappointing that the market wants the Fed to ease up,” he said.

Analysts don’t expect the central bank to move on rates, but will scrutinize the statement for signs of how much the Fed is watching recent global market activity and indications on the future path of tightening.

“I think it’s going to be volatile after 2 p.m.. I think people are going to try to read a lot into the Fed statement,” said Omar Aguilar, chief investment officer of equities at Charles Schwab Investment Management.

“The wording in the statement (and) when Janet Yellen goes in front of Congress will probably give an indication on the Fed’s view on the state of the economy,” he said.

Fed Chair Janet Yellen is scheduled to hold her semi-annual testimony before Congress in about two weeks.

In economic news, new home sales jumped to a seasonally adjusted annual rate of 544,000 from an upwardly revised November figure of 491,000.

Treasury yields held higher, with the 2-year yield at 0.87 percent and the 10-year yield at 2.03 percent.

The U.S. dollar index traded about 0.4 percent lower, with the euro edging towards $1.09 and the yen at 118.46 yen against the greenback.

Symbol
Name
Price
Change
%Change
DJIA Dow Jones Industrial Average 16042.11
-125.12 -0.77%
S&P 500 S&P 500 Index 1893.03
-10.60 -0.56%
NASDAQ Nasdaq Composite Index 4515.80
-51.87 -1.14%

In morning trade, the Dow Jones industrial average declined 156 points, or 0.97 percent, to 16,009, with Boeing the greatest decliner and United Technologies the top advancer.

The S&P 500 fell 14 points, or 0.73 percent, to 1,889, with information technology leading eight sectors lower and utilities and consumer staples the only gainers.

The Nasdaq composite fell 63 points, or 1.39 percent, to 4,503.

About two stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 195 million and a composite volume of 806 million in morning trade.

Read More: Early movers: BA, UTX, TUP, FCAU, ANTM, AAPL, F, WFC, TM & more

Crude oil futures for March delivery declined 76 cents to $30.69 a barrel on the New York Mercantile Exchange. Gold futures for February delivery fell $4.20 to $1,116.00 an ounce as of 10:29 a.m. ET.

Reuters contributed to this report.

On tap this week:

Wednesday

Earnings: eBay, Facebook, Paypal, Qualcomm, Citrix, Discover Fincl., Juniper Networks, Lam Research, SanDisk, Texas Instruments

1 p.m.: Five-year note auction

2 p.m.: FOMC statement

Thursday

Earnings: Abbott Labs, Alibaba, Altria, Bristol-Myers Squibb, Caterpillar, Deutsche Bank (prelim), Eli Lilly, Ford, AutoNation, Baker Hughes, Harley-Davidson, Hershey, Time Warner Cable, Under Armour, Amazon.com, Amgen, Microsoft, Visa, Electronic Arts, KLA-Tencor, Western Digital

8:30 a.m. Initial claims

8:30 a.m. Durable goods

10 a.m. Pending home sales; housing vacancies

10:30 a.m.: Natural gas inventories

11 a.m.: Kansas City Fed manufacturing index

1 p.m. Seven-year note auction

Friday

Earnings: AbbVie, Chevron, Colgate-Palmolive, Honda Motor, Honeywell, MasterCard

8:30 a.m. Real GDP Q4; international trade; employment cost index

9:45 a.m. Chicago PMI

10 a.m. Consumer sentiment

3:30 p.m. San Francisco Fed President John Williams on panel

*Planner subject to change.

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