Global Stocks Edge Up Ahead of Fed Policy Decision

By Avantika Chilkoti 

Global stocks ticked up on Wednesday as investors focused on major U.S. and European companies' results while awaiting fresh insights on the economy from the Federal Reserve.

Futures tied to the Dow Jones Industrial Average edged up 0.2%, and the Stoxx Europe 600 index gained 0.4%. In Hong Kong, where markets opened for trading for the first time since the Lunar New Year holidays began, the benchmark Hang Seng Index closed down 2.8% as investors weighed the impact of the fast-spreading coronavirus outbreak in China.

Ahead of the opening bell in New York, shares in Apple gained 2.1%. The technology giant late on Tuesday reported record revenue and a return to profit growth in the latest quarter with strong sales of its flagship smartphone as well as apps and AirPods wireless earbuds.

Starbucks dropped 1.5% after the chain said that a temporary closure of more than half its stores in China because of the outbreak would affect financial results for the full year.

Advanced Micro Devices retreated 4% after the chip maker's guidance for first-quarter revenue disappointed Wall Street. Smaller rival Xilinx fell 7.6% after the chip maker cut sales projections for the year and said it would reduce its workforce by 7%.

Ebay dropped over 5% in offhours trading after the e-commerce firm issued lower-than-expected guidance for first-quarter revenue.

Later in the day, U.S. companies including Mastercard, Microsoft, Facebook and Tesla are scheduled to report earnings for the latest quarter.

While the Fed is widely expected to hold interest rates stable when it concludes its latest round of policy meetings this evening, investors are likely to be watching for fresh cues on how the U.S. central bank controls short-term rates. Policy makers will be looking to unwind a program that began last year when the Fed flooded markets with cash to avoid fresh spikes in overnight lending rates.

Chairman Jerome Powell's comments at a press briefing may also provide hints of what lies ahead for the world's largest economy.

"There is not going to be any fireworks there," said Richard McGuire, head of rates strategy at Rabobank. "He's likely to reiterate his previous stance, which is that the current policy is appropriate."

In Europe, corporate earnings triggered some of the most significant moves in equities. Banco Santander rose 4.4% after the Spanish bank's fourth-quarter profit beat expectations and its core capital ratio climbed. Royal KPN lost 6.2% in Amsterdam after the Dutch telecommunications company warned that its consumer segment is under pressure from competitors.

In Asia, where markets have been roiled by the rapid spread of the coronavirus originating in central China, the death toll climbed to at least 132 and confirmed infections rose to about 6,000 people. Trading in mainland China is scheduled to resume next week after authorities decided to delay the reopening of exchanges.

--Steven Russolillo contributed to the article.

Write to Avantika Chilkoti at [e-mail]

(END) Dow Jones Newswires

January 29, 2020 06:57 ET (11:57 GMT)

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