Global Stocks Edge Lower as Investors Await Fed Minutes

By Dan Strumpf And Chiara Albanese 

U.S. stocks eased Thursday as investors await further clues about the timing of a potential interest-rate increase and the start to the third-quarter earnings season.

The Dow Jones Industrial Average slipped 14 points, or 0.1%, to 16898 in midmorning trading. The S&P 500 lost 0.3%, while the Nasdaq Composite Index declined 0.7%.

The Federal Reserve is due to release notes this afternoon from the most recent policy meeting, which could offer clues on the timing of forthcoming interest-rate increases.

And, the third-quarter earnings season unofficially kicks off Thursday with a report from aluminum giant Alcoa Inc., due after the closing bell. Investors are bracing for another weak quarter as U.S. multinationals remained hobbled by slumping commodity prices and a strong U.S. dollar.

"There's a lot of uncertainty among professional investors as to whether companies are going to make or miss" earnings targets, said Brett Mock, managing director at brokerage firm JonesTrading. "Earnings are a big tossup."

Earnings among companies in the S&P 500 are expected to decline 5.4% in the third quarter, according to analysts surveyed by FactSet.

U.S. stocks have rallied in recent sessions after last week's disappointing employment data for September pushed back investors' expectations over the timing rate increases. The Dow is up more than 7% since its late-August slump.

In Europe, stocks were slightly higher. The Stoxx Europe 600 index climbed 0.2%. The

"Markets are taking a breather after a nice rebound," said Jeroen Blokland, portfolio manager at Dutch asset manager Robeco, which oversees EUR273 billion ($307 billion) in assets.

The yield on the 10-year Treasury note rose to 2.068% as prices fell.

The release of the minutes from the Fed's September meeting is expected to offer investors more insight over the central bank's thinking. Low interest rates have boosted global stocks for the last six years.

"Fed minutes will be under fierce scrutiny tonight," Mr. Blokland said.

While the minutes will offer new information on the discussion going on at the central bank level, "it is hard to forecast a change in the Fed stance without an improvement in economic data," said Sean Shepley, head of macro strategy at Credit Suisse in London, referring to a weaker than expected U.S. employment report last week.

Elsewhere, the Bank of England kept its benchmark interest rate unchanged at 0.5% Thursday, a decision which was largely expected by analysts and investors.

"[The Bank of England has] no urgency to hike rates," said Michael Saunders, economist at Citigroup. He expects the central bank to keep rates unchanged for the next 12 months, with the first increase in rates in late-2016.

Earlier in the day Hong Kong's Hang Seng Index lost 1%. Japan's Nikkei Stock Average was also down 1%, pulling back from a winning streak that has boosted Japanese shares to their highest level in almost a month.

China's Shanghai Composite Index rose 3% Thursday, as it caught up with a rally in global equities after a week-long holiday.

In currencies markets, the dollar fell slightly against the yen to trade around Yen119.87. The euro was up 0.3% against the dollar at $1.1271.

U.S.-traded crude futures gained 1.2% to $48.37 a barrel. Gold prices fell 0.4% at $1144.50 an ounce.

Write to Dan Strumpf at [e-mail] and Chiara Albanese at [e-mail]

(END) Dow Jones Newswires

October 08, 2015 11:28 ET (15:28 GMT)

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