US stocks open slightly lower despite trade optimism

Traders work on the floor at the New York Stock Exchange October 9, 2019. — Reuters pic
Traders work on the floor at the New York Stock Exchange October 9, 2019. — Reuters pic

NEW YORK, Oct 29 — Wall Street pulled back from yesterday’s big gains, opening today’s session slightly lower despite continued optimism on the prospects for a partial US-China trade deal.

Investors are awaiting news from the Federal Reserve, which opened its two-day meeting today amid expectations it will deliver a third consecutive reduction in borrowing rates.

Meanwhile, a flood of major earnings releases are competing with key economic data reports, including consumer confidence today and all-important employment data on Friday.

The S&P 500 shot to a new record close yesterday but eased back at the open, slipping 0.1 per cent to 3,036.95 about 15 minutes into the trading day.

The Dow Jones Industrial Average was essentially flat at 27,075.21, while the tech-rich Nasdaq Composite index dipped 0.3 per cent to 8,300.64.

“It has been a busy period of earnings reporting since yesterday’s close, yet that busy business has failed to move the needle much for the market,” Patrick O’Hare of Briefing.com said in a market commentary.

Stocks have been moving cautiously higher over the past week after US President Donald Trump announced major progress towards a “phase one” trade agreement with China. The hope is the deal will remove some of the tariffs that have frozen investments and have begun to hit US manufacturing.

Trump has said he expects to sign the partial deal with China’s President Xi Jinping later this month on the sidelines of the APEC summit in Santiago.

The South China Morning Post reported Tuesday from Hong Kong that the Trump-Xi meeting is set for November 17 — at the conclusion of the summit — citing a source briefed on the arrangements.

General Motors shares gained 4.6 per cent after the company said the 40-day strike that ended on Friday would slash US$3 billion off the bottom line for the year. Despite that, the company’s quarterly earnings topped expectations.

Google-parent Alphabet lost 2.1 per cent after missing earnings estimates in the results reported after the close on Tuesday.

And pharmaceutical giant Pfizer jumped 3.6 per cent and Merck gained 1.8 per cent after blowing past quarterly earnings estimates and raising their full-year profit forecasts. — AFP

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