United States stocks slipped, on Thursday, as investors turned defensive ahead of next week’s Federal Reserve policy meeting, Reuters reported.
The price cuts in stocks appeared to put the S&P 500 index on track for its first loss after a seven-day winning streak, while data showing a drop in euro zone factory output stalled an eight-day rise in world equity markets.
New US claims for state unemployment benefits slipped 31,000 to a seasonally adjusted 292,000 in the latest week, the lowest level since 2006, but since the Labor Department said technical problems had kept two states from processing all the claims they received, markets dismissed the news.
The dollar slipped from a seven-week high against the yen and traded little changed against the euro as US bond yields declined and investors speculated the Fed would be cautious about reducing stimulus when it meets next week.
US treasuries prices rose as investors recovered from a mammoth week of new corporate bond and government supply.
The Treasury sold $13bn in 30-year bonds on Thursday, the final sale of $65bn in new US government debt this week.
Market moves were modest, however.
“I would expect to see a holding pattern and possibly some risk aversion between now and the Fed’s policy meeting,” said Robert Tipp, chief investment strategist with Prudential Fixed Income, with about $400bn in assets under management, in Newark, New Jersey.
Investors are focused on the Fed’s policy meeting on Tuesday and Wednesday, with expectations growing that the US central bank will begin to reduce its monthly bond purchases, but by less than once thought.
Uncertainty about how much the Fed would reduce stimulus has grown with weaker-than-expected US data, including jobs growth in August, and consumer spending, home building, new home sales, durable goods orders and industrial production in July.
A Reuters poll of economists on Monday found that most now see the Fed trimming its $85 billion monthly spending on bonds by about $10bn, compared with estimates for a $15bn reduction in a poll before the jobs report.Global equities decline by ngcareers