US stocks retreat ahead of Fed meeting

New York, Sep 10 (IANS) the US stocks reversed early gains to end sharply lower on Wednesday as investors remained cautious ahead of the Federal Reserve’s policy meeting next week.

The Dow Jones Industrial Average dipped 239.11 points, or 1.45 percent, to 16,253.57. The S&P 500 lost 27.37 points, or 1.39 percent, to 1,942.04. The Nasdaq Composite Index was down 55.40 points, or 1.15 percent, to 4,756.53, reports Xinhua.

Wall Street followed the Fed closely ahead of its key policy meeting next week, when the US central bank could raise interest rates for the first time in more than nine years.

The US Labour Department showed on Wednesday that the number of job openings again rose to a high of 5.8 million on the last business day of July.

Some analysts believe the possibility for the Fed to raise interest rates this month is higher as the US job market continued its steady growth momentum.

“The Fed expects the job market will tighten as long as it waits to raise rates. Hence, the FOMC (Federal Open Market Committee) must weigh the risks to markets from a gradual tightening starting now or a faster tightening if they delay,” chief economist at FTN Financial Chris Low said in a note.

Meanwhile, the diving oil prices, which dragged the energy sector down 1.94 percent as the biggest laggard among the S&P 500’s ten sectors, also weighed on market sentiment.

Overseas stock markets, however, increased broadly Wednesday.

In Asia, Japanese equities soared 7.71 percent with its benchmark Nikkei stock index notching its biggest percentage gain since October 2008, as steep gains in global stock markets overnight triggered a rebound from recent losses.

Chinese shares gained for the second straight day Wednesday following the government’s new fiscal stimulus measures, with the benchmark Shanghai Composite Index rising 2.29 percent.

European shares also finished higher on Asia stimulus hopes Wednesday, with French benchmark index CAC 40 going up 1.44 percent.

The CBOE Volatility Index, often referred to as Wall Street’s fear gauge, increased 5.34 percent to end at 26.23 on Wednesday.

In other markets, the US dollar climbed against most major currencies following overall rises across global equity markets.

In late New York trading, the euro rose to 1.1198 dollars from 1.1187 dollars in the previous session, while the dollar bought 120.56 Japanese yen, higher than 119.99 yen of the previous session.

Gold futures on the COMEX division of the New York Mercantile Exchange extended losses and settled at the lowest price in a month as US dollar turned higher.

The most active gold contract for December delivery lost 19.00 dollars, or 1.69 percent, to settle at 1,102.00 dollars per ounce.

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