US stocks fall as investors await Fed rate move

US stocks fell in morning trading on Monday as investors awaited Federal Reserve’s interest rate meeting this week even as fears of slowing growth in China continue to rattle global markets.

Stocks are expected to remain volatile in the run-up to the policy meeting on Wednesday and Thursday, when the Fed is expected to decide on its first interest rate increase since 2006.

“The uncertainty is so high in regard to the announcement ... it leaves investors a little bit paralysed relative to what to do in anticipation thereof,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

A Reuters poll showed that a small majority of forecasters still expect a Fed hike on Thursday, though markets-based models suggest policy tightening will be delayed.

Data on Monday showed that growth in China’s investment and factory output in August missed forecasts, raising the chances that China’s third-quarter economic growth may dip below 7 percent for the first time since the global crisis.

“China continues to be a concern as investors look for a bottom in regard to the country even though the government has a lot of room to stimulate growth,” said Chris Bertelsen, chief investment officer of Global Financial Private Capital in Sarasota, Florida.

Dow Jones

Mid-morning the Dow Jones industrial average was down 24.49 points, or 0.15 per cent, at 16,408.6, the S&P 500 was down 3.94 points, or 0.2 per cent, at 1,957.11 and the Nasdaq composite was down 11.06 points, or 0.23 per cent, at 4,811.28.

Nine of the 10 major S&P sectors were lower with the materials index’s 0.89 percent fall leading the decliners.

The energy index declined 0.8 per cent as oil prices fell more than 1 per cent on weak China data. Exxon and Schlumberger fell about 1 per cent.

Stocks have been volatile since China devalued its currency in August and the impact of a slowdown in the country on global growth rattled investors. The S&P 500 has had moves of at least 1 percent in more than 10 sessions since Aug. 20.

- Reuters