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US STOCKS-Wall Street falls as energy drags; focus shifts to Fed meeting

Published 17/09/2019, 15:32
© Reuters.  US STOCKS-Wall Street falls as energy drags; focus shifts to Fed meeting
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(For a live blog on the U.S. stock market, click LIVE/ or

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* Energy shares drop as oil prices slide

* Home Depot drops after Guggenheim downgrade

* Corning cuts forecast for display volumes; shares fall

* Indexes down: Dow 0.21%, S&P 0.03%, Nasdaq 0.04%

(Updates to open)

By Medha Singh

Sept 17 (Reuters) - U.S. stocks edged lower on Tuesday as a

drop in oil prices weighed on the energy sector, while investors

stayed away from making big bets ahead of the Federal Reserve's

two-day policy meeting, where it is widely expected to cut

interest rates.

The energy index .SPNY fell 1.59% and was the biggest drag

on the benchmark S&P 500 index .SPX after sources told Reuters

that Saudi Arabia was close to restoring 70% of the oil

production lost after weekend attacks on its biggest refinery.

The sector recorded its best one-day surge since January on

Monday.

The U.S. central bank concludes its policy meeting on

Wednesday, with traders currently expecting a 65.8% chance of a

quarter percentage point cut from the Fed this week, down from

88.8% on Friday, according to CME's FedWatch.

Rate-sensitive bank index .SPXBK was down 1% in

anticipation of a reduction in borrowing costs.

"It's just typical trading on the vigil of a Fed meeting,"

said Peter Cardillo, chief market economist at Spartan Capital

Securities in New York.

"We haven't seen any panic from what happened over the

weekend. I think (the Fed) will stick with a quarter of a

percentage point cut even after the Saudi attack."

Since the last interest rate cut in July, U.S. economic data

has shown mixed signals about the domestic economy. While strong

retail sales and wage growth have bolstered consumer confidence,

a protracted U.S.-China trade war has weighed on manufacturing

and business sentiment.

Latest data showed U.S. manufacturing output increased more

than expected in August, rebounding from a drop in July.

At 10:04 a.m. ET, the Dow Jones Industrial Average .DJI

was down 58.03 points, or 0.21%, at 27,018.79, the S&P 500

.SPX was down 1.03 points, or 0.03%, at 2,996.93. The Nasdaq

Composite .IXIC was down 3.29 points, or 0.04%, at 8,150.26.

Among stocks, Home Depot Inc HD.N dropped 1.6% after

Guggenheim downgraded the home improvement chain's shares to

"neutral" from "buy".

Corning Inc GLW.N tumbled 7.8% after the Gorilla glass

maker cut its current-quarter display volume forecast.

Kraft Heinz Co KHC.O slipped 3.7% after the packaged food

maker's second-largest investor, 3G Capital, sold over 25

million shares in open market at a discount.

Deputy-level trade talks between the United States and China

are set to resume on Thursday, but any agreement between the two

sides is expected to be a superficial fix at this stage.

Tariff concessions from both countries last week helped the

benchmark S&P 500 come within 1% of its all-time high touched in

July.

Declining issues outnumbered advancers for a 1.59-to-1 ratio

on the NYSE and a 1.77-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and one new

low, while the Nasdaq recorded 24 new highs and 10 new lows.

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