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Stocks drop with Fed policy, focus on earnings


Stocks lost ground on Tuesday, as another wave of earnings arrived and investors awaited the Federal Reserve policy meeting and jobs data later this week.

S&P 500 (^ GSPC) fell about 0.23% in afternoon trading, while the Dow Jones Industrial Average (^ DJI) decreased by almost 0.2%. The tech-heavy Nasdaq Composite (^ IXIC) decreased by 0.5%. All three indexes rose at the start of the session.

Investors looked to Tuesday’s economic releases, including the Employment and Labor Turnaround Survey (JOLTS), which showed a surprise job gain in September to 10.7. million from 10.28 million last month. Economists expect openings to fall to around 10 million, which would be consistent with The kind of cooling the Federal Reserve wants to see on the labor market.

Meanwhile, the ISM manufacturing PMI in October fell to 50.2, while economists surveyed by Bloomberg estimated 50.0. The ISM manufacturing employment index rose from 48.7 to 50.0, as economists surveyed by Bloomberg estimated at 53.0.

Stock moves take place after the major indexes being late on monday as investors prepare for the Federal Reserve’s interest rate decision this week. Still, stocks ended October on a high, as the Dow posted its best monthly return since January 1976, when the index rose 14.2%, data from Bespoke Investment Group shows. see.

The Fed’s aggressive pace of rate hikes has weighed on markets for much of the year, keeping investors hopeful on any sign of central bank will leave its hawkish stance.

The Fed is generous is expected to raise interest rates 75 basis points on Wednesday at the conclusion of its two-day policy meeting, but some strategists see the bank as slowing future growth.

JPMorgan economist Michael Feroli sees “one step down from 75bps to 50bps and then 25bps before this tightening cycle ends. Any indication from the Fed that [the] lower ending rates or tightening cycles ending in 2022 are likely [be] actively digested by stocks. The biggest risk to this view is that CPI will rise hotter than expected next week or in December”.

Regardless of the size of the move in December, “the Fed is in a difficult position because they are so data dependent. And it remains unclear how quickly inflation will fall,” said Public Markets Lead Lisa Erickson Yahoo Finance Live in Monday.

Also on the Tuesday earnings front:

  • Uber (UBER): The ride-hailing giant posted a third quarter loss but beat analysts’ estimates for revenue and saw bookings skyrocket. Shares were up more than 14% in early trading.

  • Pfizer (PFE): Apothecary posted a better than expected quarter and raised its revenue outlook for the year although higher prices offset slowing COVID-19 vaccine demand outside the United States.

  • SoFi (SOFI): The digital bank reported a smaller-than-expected quarterly loss and revenue topped analysts’ estimates. The fintech company released its guidance as it added 4.7 million customers at the end of the third quarter.

  • Eli Lilly and Company (ONLY): Pharmaceutical company beat the third quarter expectations but cut the 2022 outlook, citing exchange rates and tax laws.

  • Abiomed (ABMD): Small heart pump manufacturer agreed to nearly 17 billion dollars takeover by Johnson & Johnson (JNJ) because the deal gives J&J exposure to a growing segment of medical technology.

Advanced Microphone Device (AMD), Airbnb (ABNB), Mondelez (MDLZ) and Clorox (CLX) is also set to report Tuesday.

And the week will end with the October jobs report. The Labor Department report is expected to show monthly payrolls falling below 200,000, while economists surveyed by Bloomberg estimate 190,000 jobs. was added or created in the last month.

In the energy market, Brent crude, the international benchmark for oil prices, fell to $94.36 a barrel on Tuesday morning. Yield on 10-year Treasury note down to 12 basis points below 4% before rising back above it late in the morning.

US listed shares of Chinese companies including Alibaba (TORTOISE) also surged on Tuesday as unconfirmed reports on social media swirled that the Chinese government may be moving towards scrapping its strict COVID policy.

Elsewhere, the Toronto Stock Exchange has continued trading after a technical problem stopped the market shortly after the opening bell on Tuesday.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniroromerotv

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