US stocks drop ahead of Fed statement; oil shares fall

Wednesday, 18 March 2015 21:52

Posted by Imaduddin

NEW YORK: US stocks fell in early trade Wednesday with petroleum stocks sagging on weak oil prices as investors looked ahead to the Federal Reserve’s afternoon policy announcement.

About 30 minutes into trade, the Dow Jones Industrial Average stood at 17,752.26, down 96.82 points (0.54 percent).

The broad-based S&P 500 lost 8.36 (0.40 percent) at 2,065.82, while the tech-rich Nasdaq Composite Index fell 13.86 (0.28 percent) to 4,923.57.

Dow member ExxonMobil fell 0.3 percent and oil-services titan Schlumberger shed 1.0 percent as US oil prices dived ahead of a government report on American petroleum inventories.

The market was gearing up for an 1800 GMT Fed announcement following a two-day monetary policy meeting. The US central bank is expected to give clues on the timing of an increase in near-zero interest rates, perhaps as early as June.

Shipping company FedEx fell 2.0 percent after reporting third-quarter earnings rose 53 percent to $ 580 million. The company projected full-year earnings of $ 8.80-$ 8.95 per share, slightly below the analyst estimate of $ 8.97 per share.

Software giant Oracle bolted 4.4 percent higher as it reported flat third-quarter revenues of $ 9.3 billion, despite a big drag from the strong dollar. The company said revenues would have risen six percent in constant currencies.

Adobe Systems, another software company, fell 4.0 percent as it projected second-quarter earnings of 41-47 cents per share, below the 48 cents expected by analysts.

Kraft Foods Group dropped 2.0 percent on news it recalled 242,000 cases of macaroni and cheese products because some boxes may contain small pieces of metal.

General Motors fell 0.6 percent on news its Opel European arm would withdraw from the Russian market and shutter a factory in St. Petersburg. The US automaker said it would focus in Russia on premium products such as Cadillac.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.02 percent from 2.05 percent, while the 30-year dropped to 2.58 percent from 2.61 percent. Bond prices and yields move inversely.