Tuesday October 26th

27-10-2015

Wall Street on standby ahead of Apple, Fed

U.S. stock index futures indicated a lower open on Tuesday as the Federal Reserve's two-day policy meeting gets underway and investors prepared for another mass of major corporate earnings. The market could tread water again Tuesday, as the Fed begins its two-day meeting where it is expected to hold off on an interest rate rise. The central bank releases its post-meeting statement at 2 p.m. ET Wednesday, and it is expected to leave the door open for the chance of a December rate hike. In economic news, U.S. durable goods orders showed a decline of 1.2 percent in September. U.S. stock index futures extended losses and Treasury yields ticked lower. The 10-year yield was 2.02 percent and the 2-year yield was 0.63 percent. S&P Case-Shiller home prices are due at 9 a.m. and consumer confidence at 10 a.m. Traders will also be closely watching Apple's third quarter earnings report, due after the bell. Shares in the tech giant came under pressure on Monday, falling over 3 percent after news that supplier Dialog Semiconductor reported preliminary earnings and guidance that missed expectations, according to Street Account. Shares of Dialog plunged 20 percent in London trade. In addition to Apple, there's a parade of early morning results from drugmakers — Pfizer, Merck and Bristol-Myers — and firms such as Ford, UPS, BP, Cummins, Corning, Coach, Novartis, JetBlue, AK Steel, and Alibaba. Twitter, Gilead Sciences, Shutterfly, Owens-Illinois, Panera Bread, Equity Residential, KKR and TransUnion all report after the close. Chinese e-commerce giant Alibaba's second-quarter revenue rose 32 percent, beating analysts' estimates, even as the value of goods transacted on its platform grew at a slower pace. Alibaba shares rose nearly 7 percent in premarket trading following the report. In Europe, stocks followed the negative lead set in Asia overnight. Asian stocks declined on Tuesday, giving up the previous day's gains, amid weak commodity prices and negative industrial profits data from the world's second-largest economy, China. Asian stocks turned mixed on Tuesday as mainland markets reversed their losses but lower oil prices still weighed on regional resource firms. Nikkei slips 0.9%. Japan's Nikkei 225 deepened its losses, retreating from Monday's near two-month closing high. European chipmakers were trading lower ahead of Apple's earnings. Dialog Semiconductor, saw shares tumble as much as 8 percent after it received a round of downgrades to its price target from RBC, Deutsche Bank, Natixis and Commerzbank. Meanwhile, there appeared to be some encouraging news overnight with respect to prospects of a near-term budget deal, as Congress and the White House have reached a tentative agreement to effectively suspend the debt ceiling until March 2017, which would effectively avoid a potential government shutdown at least until after the election. Oil prices fell on Tuesday, extending losses into a third week, on worries over a supply glut and with U.S. inventory data expected to show another increase in crude stocks. Brent for December delivery had fallen 30 cents to $47.24 a barrel by 8 a.m. EDT (1200 GMT), after settling the previous session down 60 cents. U.S. crude dropped 59 cents to $43.39 a barrel, having ended the previous day down 62 cents. Gold firmed on Tuesday, as caution ahead of a Federal Reserve meeting starting later in the day weighed on risk appetite and the dollar eased, but moves were muted as buyers awaited clues on the timing of a possible U.S. interest rate hike. Spot gold was flat around $1,163 an ounce, while U.S. gold futures for December delivery were down $2.90 an ounce at $1,163.30.