US stocks slipped from their all-time highs today, weighed down by Apple and the hawkish stance of the Federal Reserve, which hinted at raising interest rates for a third time this year despite low inflation.NEW YORK, Sept 21 —
Shares of Apple fell 1.7 per cent and was on track to post its biggest two-day decline since June. The stock was the biggest drag on the three major indexes.
Investors were also absorbing the Fed’s decision to start ending monetary stimulus by reducing its approximately US$4.2 trillion (RM17.63 trillion) in holdings of US Treasury bonds and mortgage-backed securities – acquired in the years after the 2008 financial crisis – from October.
While the central bank left rates unchanged, it cited low unemployment, growth in business investment and an economic expansion that has been moderate but durable this year to build its case for another rate hike in 2017.
Interest rate futures are now pricing in about a 70 per cent chance of a December hike, according to CME’s FedWatch tool, up from above 50 per cent prior to the Fed meeting.
Fed Chair Janet Yellen said the fall in inflation this year remained a mystery, adding that the central bank was ready to change the interest rate outlook if needed.
“Today’s movement is most likely a give back as people digest the Fed statement and press conference,” said Michael Dowdall, investment strategist at BMO Global Asset Management.
“Clearly the Fed doesn’t have answers on the 2017 low inflation weakness but they’re still very sensitive to falling behind the curve so they want to stay in front of the inflation curve.”
At 10:53 a.m. ET (1453 GMT), the Dow Jones IndUS$trial Average was down 9.04 points, or 0.04 per cent, at 22,403.55, the S&P was down 4.57 points, or 0.18 per cent, at 2,503.67.
The Nasdaq Composite was down 34.31 points, or 0.53 per cent, at 6,421.74.
Seven of the 11 major S&P sectors were lower, with the technology index’s 0.76 per cent fall leading the decliners.
Nvidia pared losses to trade down 3.1 per cent after GlobalFoundries, which fabricates chips for Advanced Micro Devices, said Tesla had not committed to working with the company to develop its own artificial intelligence chip for self-driving cars. Advanced Micro pared gains to trade up 0.3 per cent, while Tesla was off 0.8 per cent. US stocks have continued to climb this year, with the S&P up about 12 per cent so far, helped by strong corporate profits and optimism that US President Donald Trump will cut taxes for businesses.
Valuations are stretched with the S&P trading near 17.6 times expected earnings, compared to its 10-year average of 14.3, according to Thomson Reuters Datastream.
Shares of Calgon Carbon soared 61.9 per cent after Japanese chemical manufacturer Kuraray agreed to buy the carbon materials firm for US$1.107 billion.
Advancing issues outnumbered decliners on the NYSE by 1,340 to 1,319. On the Nasdaq, 1,455 issues fell and 1,199 advanced. — Reuters
Source: The Malay Mail Online