US Stocks Lower as Rate Hike Worries Surface
New York (Sept 14) Stocks bounced off session lows on Monday morning, though remained in the red, as investors showed their nerves ahead of the Federal Reserve meeting later this week. The meeting could result in the first interest rate hike in nearly a decade.
The S&P500 was down 0.29%, the Dow Jones Industrial Average fell 0.3%, and the Nasdaq slid 0.24%.
The Fed's September meeting will begin on Wednesday, culminating in a press conference -- and possible interest rate hike -- on Thursday afternoon. An increase in rates would mark the first since 2006.
"Trading until the announcement is going to be really choppy," Jeff Kravetz at U.S. Bank's private Client Reserve told TheStreet. "It's really just a wait-and-see game because you've got so many people split on this issue. For every person I talk to, you can find another person that has the opposite opinion."
Crude oil prices continued to bounce around as investors weighed a supply glut against signs of slowing production in the U.S. Late last week, Goldman analysts predicted oil could fall as low as $20 a barrel on oversupply concerns. The latest check on rigs helped to lift some of those fears, though, after the number of active drilling rigs in the U.S. fell by 16 over the past week, according to Baker Hughes data.
West Texas Intermediate crude was down 1.5% to $43.95 a barrel. Prices remain down nearly 24% in the year to date and down 50% from a year earlier.
Fiat Chrysler (FCAU) has been picked as the target representative in labor talks in the U.S. Fiat will have the first chance to negotiate wages and benefits for more than 140,000 unionized factory workers at Fiat, General Motors (GM - Get Report) and Ford (F - Get Report) in Detroit.
Google (GOOGL - Get Report) has hired former CEO of Hyundai John Krafcik to lead its self-driving car business. The unit is currently housed under tech experimental arm Google X. Krafcik will join the team in late September.
Alibaba (BABA) shares dropped more than 3% after financial magazine Barron's warned shares could fall more than 50% as the company faces slowing demand and increased competition in China. However, Alibaba has lashed out in a rebuttal to the claims in a letter from Senior Vice President Jim Wilkinson. Wilkinson noted it is flawed to assume demand will fall as the general economy slows as Alibaba customers are city-dwellers and more affluent.
Analysts at Barron's appeared more optimistic on Apple's (AAPL) potential growth, noting that the new iPhone line could lift shares by around 50%. The move to lease phones and provide annual upgrades could put it in competition with telecom providers including Verizon (VZ) , AT&T (T) and Sprint (S) . Apple shares climbed 2%
Shire (SHPG) is reportedly considering sweetening a deal to purchase Baxalta (BXLT) by including cash in the $30.6 billion offer. The drug company has offered to launch a share buyback program shortly after the close of the deal, according to The Wall Street Journal.
Software company Solera Holdings (SLH) shot 8% higher after it confirmed it has accepted an offer to be acquired by Vista Equity Partners for $55.85 a share, or around $6.5 billion. The deal will likely close in the first quarter of 2016.
Source: TheStreet
