Japan PPI inflation slips to 11-mth low in July
* Fed expected to cut interest rates by 25 bps
* Kansas City Southern gains on profit beat
* American Express falls as expenses rise
* Indexes down: Dow 0.02%, S&P 500 0.40%, Nasdaq 0.53%
(Updates to late afternoon, changes byline, adds NEW YORK to
dateline)
By Evan Sully and April Joyner
NEW YORK, July 19 (Reuters) - Wall Street's main indexes
edged lower on Friday after a report that the Federal Reserve
plans to cut interest rates by only a quarter-percentage point
at the end of July.
The benchmark S&P 500 erased earlier marginal gains after
the Wall Street Journal report https://www.wsj.com/articles/fed-officials-signal-quarter-point-rate-cut-likely-at-july-meeting-11563559491.
According to the report, while the U.S. central bank is not
prepared to make a bigger 50-basis-point cut, it may make
further rate cuts in the future given concerns about a decline
in global economic growth and uncertainty about trade.
On Thursday, stocks had risen as comments from New York Fed
President John Williams increased hopes of a bigger rate cut.
Later that day, however, a New York Fed representative said that
Williams' comments were not intended to telegraph any hints
about upcoming Fed policy actions. Futures market odds of a 50-basis-point cut at the Fed's
July meeting soared to 71% late Thursday immediately after
Williams' speech but fell to 23% on Friday, according to CME
Group's Fedwatch tool.
"It appears that the Fed has communicated its message," said
Bucky Hellwig, senior vice president at BB&T Wealth Management
in Birmingham, Alabama. "They're basically trying to clarify
their policy."
The Dow Jones Industrial Average .DJI fell 5.85 points, or
0.02%, to 27,217.12, the S&P 500 .SPX lost 11.94 points, or
0.40%, to 2,983.17 and the Nasdaq Composite .IXIC dropped
43.66 points, or 0.53%, to 8,163.58.
Earlier, U.S. stocks had edged higher as strong results from
Microsoft Corp MSFT.O momentarily buoyed technology stocks.
Microsoft shares were last marginally higher, up 0.3%.
Second-quarter profits at S&P 500 companies are now
estimated to rise 1%, according to Refinitiv IBES data, in a
reversal from earlier expectations of a small drop.
Boeing Co BA.N shares gained 4.2%, despite the
planemaker's disclosure that it would take a $4.9 billion
after-tax hit from the grounding of its 737 MAX, indicating that
investors had expected more severe repercussions. Kansas City Southern KSU.N shares rose 4.0% after the
railroad operator posted a better-than-expected quarterly
profit. Its shares helped the Dow Jones Transport index .DJT
gain 0.8%.
Shares of American Express Co AXP.N slipped 2.6% after the
credit card issuer warned of higher operating costs this year as
it spends heavily on rewards programs to attract customers.
Declining issues outnumbered advancing ones on the NYSE by a
1.15-to-1 ratio; on Nasdaq, a 1.31-to-1 ratio favored decliners.
The S&P 500 posted 45 new 52-week highs and five new lows;
the Nasdaq Composite recorded 72 new highs and 76 new lows.