Markets open low; investors await Fed meeting on interest rates
NEW YORK – More signs of slowing economic growth in China weighed on companies that produce raw materials on Monday, pulling the stock market to a slight loss. Trading was light as investors looked ahead to a much-anticipated Federal Reserve meeting later this week.
Brad McMillan, chief investment officer for the Commonwealth Financial Network, said the market was likely to drift until the Fed wraps up its meeting Thursday. “Everybody is waiting to see what happens when and if the Fed raises rates.”
Until recently, many in the markets thought the Fed would raise its benchmark interest rate at the end of its two-day meeting Thursday. Now, opinions are split. Some analysts suggest China’s slower economy and turbulence in financial markets might prompt the Fed to postpone its first rate increase since 2006. But the Fed’s deputy chairman, Stanley Fischer, recently said he saw a “pretty strong case” for raising rates.
Major U.S. indexes opened higher, then quickly changed course. They sank slowly through the rest of the morning and remained lower through the remainder of the day. Miners and other materials companies had some of the biggest losses. Metals companies Alcoa and Nucor dropped 3 percent, while Freeport-McMoRan lost 2 percent.
The Standard & Poor’s 500 index lost 8.02 points, or 0.4 percent, to close at 1,953.03.
The Dow Jones industrial average gave up 62.13 points, or 0.4 percent, to 16,370.96, and the Nasdaq composite fell 16.58 points, or 0.3 percent, to 4,805.76.
Apple reported strong demand for its latest iPhones, driving its stock up. The tech giant said that initial sales of the iPhone 6s and iPhone 6s Plus are on track to beat the tally from last year, when it sold a record 10 million large-screen iPhones during the first weekend. Apple climbed $1.10, or 1 percent, to $115.31.
Two economic reports out Sunday rekindled concerns over China’s economic slowdown. Factory output and investment grew at a slower pace than forecast. China’s main stock index, the Shanghai Composite, took another hard fall on Monday, dropping 2.7 percent