With Fed Playing Indecisive, S&P 500 and Emerging Markets Dive

Nichole Harper
22 Sep, 2015
New York City

Market indexes across Atlantic dropped more than 1% on the potential that the Fed may push rate hike until next year. Dollar traded at a 2-week high. Commodities extended monthly loss with copper and other base metal reaching monthly lows.

[R]2:00 PM New York City, New York – Market indexes across Atlantic dropped more than 1% on the potential that the Fed may push rate hike until next year. Dollar traded at a 2-week high. Commodities extended monthly loss with copper and other base metal reaching monthly lows.][/R]

U.S. indexes dropped more than 1% on the ongoing interest rate uncertainties and another decline in commodities prices.

Copper declined to a 3-week low and crude oil fell 2% on growing speculation that demand from China is weakening.

Fed officials are scheduled to speak today and tomorrow, but what matters what to the market is what Fed does. And, so far Fed has played coy and left door open for a rate hike later in the year.

That uncertainty has sapped market momentum, and investors have been yanking money from international and emerging markets and currencies have been on the free fall in Russia, Indonesia, Brazil and South Africa, Canada and Australia.

On Wall Street, Tollbooth Strategy Index slipped 131.91 or 1.3% to 10,302.30.

S&P 500 index slumped 33.39 or 1.7% to 1,933.58 and the Nasdaq Composite Index declined 102.30 or 2.1% to 4,726.92.

Crude oil in New York dropped $1.02 to $45.66 a barrel and gold fell $7.50 to $1,125.30 an ounce.

U.S. Movers

Carnival Corporation ((CCL)) dropped 2.6% or $1.36 to $51.32 after the cruise operator reported total revenues in the third-quarter ending in August slid 1.4% from a year ago to $4.88 billion.

Net income in the quarter fell 1.6% to $1.22 billion or $1.56 per diluted share compared to $1.24 billion or $1.60 from the same quarter last year.

The company lifted non-GAAP diluted earnings per share forecast for the year to between $2.56 and $2.60 compared to the earlier estimated range of $2.35 to $2.50 and reported non-GAAP diluted earnings per share of $1.93.

ConAgra Foods Inc ((CAG)) declined 4.5% or $1.92 to $40.48 after the packaged food maker said total sales in the first-quarter ending in August rose 1.1% from a year ago to $2.79 billion.

Net in the quarter swung to a loss of $1.24 billion or $2.85 per diluted share compared to profit of $482.3 million or $1.12 from the same quarter last year.

European Markets

In London trading, FTSE 100 index dropped 146.20 or 2.4% to 5,962.48 and in Frankfurt the DAX index slumped 323.66 or 3.3% to 9,623.

In Paris, CAC 40 index declined 154.70 or 3.4% to 4,430.80.

Stagecoach Group Plc slid 0.9% to 337.40 pence after the U.K.-based public transport company successfully launched £400 million 10-year bonds with an annual coupon of 4%.

The company plans to use proceeds for general corporate purposes and to repay the existing debt.

Volkswagen AG plummeted 19.5% to €106.55 after the Germany-based carmaker said its plans to set aside a provision of €6.5 billion to cover the ongoing investigations and the charge will be recognized in the third-quarter of the current fiscal year.

Asian Markets

Markets in Japan were closed.

Stocks in Mumbai declined following a worldwide selloff in emerging markets after foreign investors retrenched and accelerated net selling.

Foreign institutional investors have been selling stocks of emerging markets for the last two months after U.S. Federal Reserve failed to offer any clarity on the interest rate increase timetable.

U.S. and European investors have been trimming holdings in overseas markets as the U.S. rate jitters continue to dominate global markets sentiment.

Foreign investor sold net of $2.6 billion of stocks in India in August and sold additional $337 million of stocks by September 18, according to the data available from various local exchanges.

Central government of India today approved ₹1,575.38 crore highway project in Odisha under its flagship highways building program NHDP.

Rupee weakened 15 paisa to 65.87 against one U.S. dollar.

The Sensex Index declined 541.14 or 2.1% to close at 25,651.84. The CNX Nifty dropped 165.10 or 2.1% to 7,812.

NTPC Limited declined 4.6% to ₹120.80 and the power producer plans to issue tax-free bonds worth ₹700 crore of $105 million.