S&P 500 Rebound Fades on Global Growth Concerns Ahead of Fed Meeting By Investing.com
By Yasin Ebrahim
Investing.com – The S&P 500 was flat Tuesday, as the early-day rebound from the biggest daily rout since May appeared to run out of steam amid worries about global growth worries just as the Federal Reserve kicked off its two-day meeting.
The rose 0.1%, the gained 0.1%, or 48 points, the Nasdaq added 0.3%.
Cyclical sectors including energy and consumer discretionary clawed back some of Monday’s losses, but gains were kept in check by concerns about a potential economic crisis in China, and implication for global growth, amid concerns that beleaguered real estate giant Evergrande is unlikely to receive a government bail out.
“We believe Beijing would only be compelled to step in if there is a far-reaching contagion causing multiple major developers to fail and posing systemic risks to the economy,” the rating agency said in a note dated Sept 20.
EOG Resources, Marathon Petroleum (NYSE :), and ConocoPhillips NYSE : led the way in energy. ConocoPhillips will get an extra boost from Shell (LON.) announcing it would sell its Permian basin assets to Shell for $9.5 billion cash.
The flatline in health care stocks was also exceeded by vaccine stocks. This is because most of the stocks are up following news that Washington would require that teachers and school personnel be fully immunized against Covid-19.
Pfizer (NYSE:) was flat, while BioNTech (NASDAQ:) rose nearly 2%, and Moderna (NASDAQ:) was up 3%. Johnson & Johnson (NYSE:) pared some gains despite releasing positive vaccine results showing that a second dose of its coronavirus vaccine boosts protection for moderate-to-severe Covid-19 to 94%.
As investors were worried about tech dip-buying following the selloff of the previous day, Tech failed to take part in the wider market rebound.
Google’s parent Alphabet (NASDAQ) was flat, as were Apple (NASDAQ), Facebook (NASDAQ), Amazon (NASDAQ), and Microsoft (NASDAQ).
Uber Technologies (NYSE) rose 11% following a revised forecast by the ride-sharing firm. It estimated a possible maiden adjusted profit of $32 billion in the third quarter.
According to the company, third quarter gross bookings were between $22.8 billion to $23.2 billion. This is an increase of its previous forecast between $22 billion and $24 billion.
Wall Street rebounded just before the Federal Reserve started its two day meeting.
Ahead of the meeting, the Fed’s plan to trim its $120 billion monthly bond purchase program has dominated investor attention, but some say believe the taper has been priced in.
“I think that tapering is priced into the market at this point,” But higher interest rates are going to be problematic for the consumer and for the economy going forward,” Darren Schuringa, CEO of ASYMmetric ETFs said in an interview with Investing.com on Tuesday.
Beyond the taper, however, the central bank’s projections on a first rate hike, currently expected in 2023, could surprise markets.
“If the Fed does signal an earlier rate hike [in 2022], that would be a negative shock to the equity markets, but I don’t expect that,” Schuringa added.