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U.S. stocks, Treasury yields drop ahead of Fed decision

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U.S. stocks, Treasury yields drop ahead of Fed decision
A trader works on the floor at the New York Stock Exchange (NYSE) in New York, U.S., October 30, 2019. REUTERS/Brendan McDermid   -   Copyright  BRENDAN MCDERMID(Reuters)
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By Stephen Culp

NEWYORK (Reuters) – Wall Street fell and U.S. Treasury yields dipped as data showed weakening U.S. economic growth and investors looked to an expected rate cut from the Federal Reserve.

Investor sentiment was also muted in European and emerging markets in the wake of underwhelming earnings and renewed uncertainties in Britain, which is set to hold a parliamentary election on Dec. 12.

On Wall Street, a spate of mixed corporate earnings results and a decline in the U.S. GDP growth rate kept investors cautious. Market participants will scrutinize Fed chair Jerome Powell’s remarks later in the session for clues to future economic policy.

The Commerce Department’s advance reading of third-quarter GDP <USGDPA=ECI> showed the U.S. economy expanded at a 1.9% annual rate, down from 2% in the second quarter but exceeding the 1.6% growth rate analysts expected.

“It looks like a wait and see market,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “And we’re trading in a narrow range as investors see how the Fed will thread the needle between being supportive of financial markets if the economy weakens or allowing growth to develop organically.”

The Dow Jones Industrial Average <.DJI> fell 24.7 points, or 0.09%, to 27,046.72, the S&P 500 <.SPX> lost 3.54 points, or 0.12%, to 3,033.35 and the Nasdaq Composite <.IXIC> dropped 14.26 points, or 0.17%, to 8,262.59.

The pan-European STOXX 600 index <.STOXX> lost 0.08% and MSCI’s gauge of stocks across the globe <.MIWD00000PUS> shed 0.14%.

Emerging market stocks lost 0.43%. MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> closed 0.31% lower, while Japan’s Nikkei <.N225> lost 0.57%.

Treasury yields were lower following the U.S. GDP data. Benchmark 10-year notes <US10YT=RR> last rose 11/32 in price to yield 1.7979%, from 1.835% late on Tuesday.

The 30-year bond <US30YT=RR> last rose 31/32 in price to yield 2.2855%, from 2.331% late on Tuesday.

The dollar was flat against a basket of major world currencies. The dollar index <.DXY> fell 0.01%, with the euro <EUR=> up 0.09% to $1.112.

The Japanese yen strengthened 0.01% versus the greenback at 108.89 per dollar, while Sterling <GBP=> was last trading at $1.2868, up 0.02% on the day.

Oil prices fell on worries about a possible delay in resolving the U.S.-China trade war, which has hurt global oil demand.

U.S. crude <CLcv1> fell 1.58% to $54.66 per barrel and Brent <LCOcv1> was last at $60.62, down 1% on the day.

Gold prices firmed after touching a one-week low in the previous session.

Spot gold <XAU=> added 0.5% to $1,494.38 an ounce.

Copper <CMCU3> lost 0.12% to $5,920.50 a tonne.

(Reporting by Stephen Culp)

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