Wall Street slides before Fed meet

Trader Anthony Riccio works on the floor of the New York Stock Exchange. File photo / AP

Wall Street moved lower amid further evidence of China's slowing economic growth, underpinning uncertainty ahead of this week's gathering of US Federal Reserve policy makers.

The Federal Open Market Committee will begin its two-day meeting on Wednesday, and might decide to hike interest rates for the first time since 2006.
In New York trading at about 3pm, the Dow Jones industrial average fell 0.47 percent, the Standard & Poor's 500 Index slid 0.47 percent, while the Nasdaq Composite Index retreated 0.37 percent.

"With the Fed coming out Thursday nobody wants to take any real shots," Michael Matousek, head trader at US Global Investors in San Antonio, told Reuters.
Declines in shares of Visa and those of Cisco, last down 1.4 percent and 1.3 percent respectively, led the Dow lower.

"They won't go, but they will convey a hawkish message to keep the markets on cue and prevent pricing from moving well into 2016," Gennadiy Goldberg, a New York-based US rates strategist with TD Securities, told Bloomberg. "The Fed will continue to string the market along and keep it primed for a rate hike. It will keep every meeting in play."
TD expects the Fed will raise rates in March.

Shares of Yahoo! and Alibaba slid, last down 3.3 percent and 3.1 percent respectively, after Barron's reported Alibaba's stock may drop another 50 percent amid China's economic struggles and increased competition. Alibaba begged to differ.

"We take strong issue with the reporting about the state of our company, and we feel compelled to set the record straight," Alibaba said in a statement.

Shares of Apple gained, last up 1.2 percent for the biggest percentage increase in the Dow. The company said preorders for its new iPhone model were "very strong," and are on track to top last year's record for the first weekend of sales.

"Customer response to iPhone 6S and iPhone 6S Plus has been extremely positive and preorders this weekend were very strong around the world," Apple said in a statement. "We are on pace to beat last year's 10 million unit first-weekend record when the new iPhones go on sale Sept. 25."

In Europe, the Stoxx 600 Index ended the day with a 0.6 percent decline from the previous close. The UK's FTSE 100 Index fell 0.5 percent, while France's CAC 40 Index slid 0.7 percent. Germany's DAX Index eked out a 0.1 percent advance.

The Shanghai Composite Index fell 2.7 percent after reports over the weekend showed China's industrial output and investment data fell short of expectations.

"From the perspective of monetary policy, the government has done what it can, but demand from the real economy needs to pick up to really make use of that," Ding Shuang, chief China economist at Standard Chartered in Hong Kong, told Bloomberg.

The pending Fed decision and concern about China's economic outlook also weighed on commodities, including oil and copper.