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* Fed policy decision due at 2 p.m. ET
* GE gains on quarterly profit beat, cash flow forecast
* J&J top boost to Dow
* U.S. GDP growth slows less than expected in Q3
* Indexes: Dow flat, S&P and Nasdaq off 0.04%
(Changes comment, updates market action)
By Arjun Panchadar
Oct 30 (Reuters) - U.S. stock indexes treaded water on
Wednesday as investors assessed mixed corporate reports in the
thick of earnings season, while bracing for a policy decision by
the Federal Reserve later in the day.
Shares of General Electric Co GE.N jumped 11.5% after the
industrial conglomerate beat quarterly profit estimates and
raised its cash forecast for the year. Yum Brands Inc YUM.N shed 9.5% and was among the top
decliners on the benchmark index as the KFC owner missed
quarterly profit expectations.
The central bank is widely expected to cut interest rates
for the third time this year to counter any fallout from a
protracted U.S.-China trade war on the domestic economy.
The interest rate sensitive banking sub-sector .SPXBK fell
0.79%. Six of the 11 major S&P 500 sectors were lower, with
losses in the financial sector .SPSY weighing the most.
The Fed decision is due at 2 p.m. ET followed by a news
conference from Chair Jerome Powell.
Traders have fully priced in a quarter percentage point rate
cut, up from a nearly 40% chance a month earlier. Hopes of a
rate cut and optimism around trade talks had pushed the
benchmark S&P 500 to record highs in the last two sessions.
"The (rate) cut expected today is largely baked in but the
question is if the Fed uses this as an opportunity to pause and
assess whether the easing that has taken place has had the
desired effect," said Mike Loewengart, vice president,
investment strategy at E*TRADE Financial Corp.
"All indications are that they have. So it would not be
surprising to see the Fed taking a pause from this point,"
Loewengart added.
A Commerce Department report showed U.S. economic growth
slowed less than expected in the third quarter as declining
business investment was offset by resilient consumer spending
and a rebound in exports, further allaying financial market
fears of a recession. More than half of the S&P 500 companies have posted
quarterly results so far, of which 74.1% have beaten profit
estimates. Still, analysts are expecting a 1.6% drop in
third-quarter earnings, according to Refinitiv data.
Shares of tech giant Apple Inc AAPL.O and social media
company Facebook Inc FB.O fell ahead of their earnings reports
after markets close.
At 11:08 a.m. ET the Dow Jones Industrial Average .DJI was
up 6.61 points, or 0.02%, at 27,078.03, the S&P 500 .SPX was
down 1.16 points, or 0.04%, at 3,035.73 and the Nasdaq Composite
.IXIC was down 2.94 points, or 0.04%, at 8,273.91.
Among other stocks, Johnson & Johnson JNJ.N rose 2% as the
company said 15 new tests found no asbestos in a bottle of baby
powder that the U.S. Food and Drug Administration says tested
positive for trace amounts of asbestos. FDA said it stands by
its finding. Mattel Inc MAT.O surged nearly 18% after the U.S. toymaker
reported a surprise jump in quarterly revenue on higher demand
for newer models of its flagship Barbie brand and dolls based on
Korean pop-sensation BTS. Declining issues outnumbered advancers for a 1.46-to-1 ratio
on the NYSE and a 1.60-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and three new
lows, while the Nasdaq recorded 39 new highs and 40 new lows.