Wall Street tumbles as markets soar ahead of Fed meeting

  • Microsoft wins in after-hours trading after results
  • American Express and IBM up on strong earnings
  • Indices down: Dow 0.19%, S&P 1.22%, Nasdaq 2.28%

NEW YORK, Jan 25 (Reuters) – U.S. stocks swung in afternoon trade to close lower, with interest-rate-sensitive tech stocks weighing the heaviest as uncertainties surrounding a stronger Federal Reserve more bellicose and the rise of geopolitical tensions which contributed to the rotation of the market.

In a similar pattern to Monday, U.S. stocks oscillated between steep losses and modest gains. Stocks ended well off session lows, where the S&P 500 once again flirted with confirmation of a correction.

All three major US stock indexes closed lower.

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If the flagship index had closed 10% or more below its all-time high reached on January 3, it would have confirmed that it had entered a correction on that date. It ended the session 9.2% below that level.

“We’re floating along this arbitrary 10% line, and investors are asking, ‘Is it time to protect my capital by selling or is it time to buy the dip?'” said Tom Martin, manager of main portfolio at GLOBALT in Atlanta. . “And between yesterday, with a downward and upward movement, you have this battle between the two.”

The CBOE Market Volatility Index closed at its highest level since January 29, 2021.

The Dow Jones Industrial Average (.DJI) fell 66.77 points, or 0.19%, to 34,297.73, the S&P 500 (.SPX) lost 53.68 points, or 1.22%, to 4,356.45 and the Nasdaq Composite (.IXIC) fell 315.83 points, or 2.28%, to 13,539.30.

Members of the Federal Open Markets Committee (FOMC) gathered on Tuesday for their two-day monetary policy meeting. Market participants will review the statement at the end of the meeting on Wednesday, as well as Chairman Jerome Powell’s subsequent Q&A session, for clarity regarding the central bank’s timing for raising key interest rates to fight against inflation.

“Certainly recent economic data shows some weakening,” added Martin. “You would think there might be a more dovish message from the Fed.”

Geopolitical tensions are adding to investor uncertainty, with NATO putting its forces on standby and the United States putting its troops on heightened alert in response to a buildup of Russian forces along the Ukrainian border.

These tensions caused crude oil prices to rise on concerns about tight supply, which gave energy companies (.SPNY) a solid boost.

Energy was the biggest gainer among the 11 major sectors of the S&P 500, with technology stocks (.SPLRCT) suffering the largest percentage decline.

The fourth quarter reporting season is in full swing, with 79 of the S&P 500 companies reporting. Of those, 81% delivered better-than-expected results, according to Refinitiv. But there have been notable misfires, like Netflix.

Analysts now expect overall S&P 500 earnings growth of 24.1% for the October-December period, according to Refinitiv.

General Electric Co fell 6.0% after the industrial conglomerate, weighed down by global supply disruptions, reported a drop in quarterly revenue.

IBM (IBM.N) rose 5.7% after the IT giant beat Wall Street’s quarterly estimates on the strength of its cloud and consulting businesses.

American Express (AXP.N) beat fourth-quarter earnings estimates, pushing shares of the consumer finance company up 8.9%, while Johnson & Johnson (JNJ.N) gained 2.9 % after announcing that it expects a jump of up to 46% in 2022. sales of vaccines.

Shares of Microsoft fell about 5% in extended trade after the software maker reported quarterly results.

Falling issues outnumbered rising ones on the NYSE by a ratio of 1.34 to 1; on the Nasdaq, a 1.53-to-1 ratio favored decliners.

The S&P 500 posted seven new 52-week highs and four new lows; the Nasdaq Composite recorded 19 new highs and 134 new lows.

Volume on U.S. exchanges was 13.13 billion shares, compared to an average of 11.23 billion over the past 20 trading days.

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Reporting by Stephen Culp; additional reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; Editing by Cynthia Osterman

Our standards: The Thomson Reuters Trust Principles.

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