Investing.com – Stocks held their ground Tuesday in the face of Middle East uncertainty, the spectacular crash of an IPO and what the Federal Reserve will do with interest rates on Wednesday.
After hours, shares of package shipping giant FedEx (NYSE: FDX ) tumbled after reporting disappointing earnings and offering weak guidance. The company complained about intensifying competition and the effects of global trade disputes on its business. Shares were off 9.3% to $157.36. If the loss holds Wednesday, the shares would be down for the year.
The biggest influence on the markets was the condition of Saudi Arabian oil processing facilities and oil fields after Saturday's drone attack. Saudi Oil Minister Prince Abdulaziz bin Salman said half the production at its key processing facility at Abqaiq was restored in two days. The rest will be restored by the end of September.
Crude oil prices dropped in response. West Texas Intermediate crude fell 5.66% to $59.34 a barrel. Brent crude, the global benchmark, settled down $4.47, about 6.5%, to $64.55. The December contract was down $4.12 to $63.56.
The spectacular IPO crash was WeWork parent We Co., which had once been expected to command a market capitalization of some $20 billion on its debut. The IPO was pulled Tuesday until at least October because of investor skepticism about the details.
The Federal Reserve started a two-day meeting on interest rates. A rate decision is due at 2 PM ET (18:00 GMT) Wednesday. The Fed has been expected to cut rates to 1.75% to 2%, but Investing.com'sputs gives that outcome only a 48.5% chance. The odds have declined rapidly. A week ago, the odds were around 90%.
The causes are the stock market's surge so far in September, decent economic reports and higher bond yields.
The 10-Year Treasury yield was at 1.805%, down from 1.843% on Monday. The Fed was actively involved in money markets Tuesday in a bid to push interest rates lower. The 10-year yield had been as low as 1.462% on Sept. 3 as recession worries mounted.
Airline stocks, including American Airlines Group (NASDAQ: AAL ), JetBlue Airways (NASDAQ: JBLU ) and United Airlines (NASDAQ: UAL ), moved higher as oil prices fell. Department store stocks, including Nordstrom (NYSE: JWN ), Macy’s (NYSE: M ) and Dillards (NYSE: DDS ) were sharply lower.
Software developer MSCI (NYSE: MSCI ), packaging giants Sealed Air (NYSE: SEE ) and Ball (NYSE: BLL ), plus futures trading company CME Group (NASDAQ: CME ) were among the top-performing S&P 500 stocks on the day.
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