Stocks down with markets on Fed watch; oil falls

Mon Sep 14, 2015 5:14pm EDT
 
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By Rodrigo Campos

NEW YORK (Reuters) - Stocks in major markets fell on Monday and oil prices fell as investors positioned for a Federal Reserve meeting this week that could see the U.S. central bank raise interest rates for the first time in nearly a decade.

Further weighing on risk assets, growth in China's investment and factory output missed forecasts in August, adding to softer data that raised the chances that economic growth may dip below 7 percent in the third quarter and for the first time since the global financial crisis.

The U.S. dollar closed little changed after hitting a near three-week low against a basket of major currencies, with investors squarely fixed on whether interest rates would be kept at their record lows until at least December.

Wall Street fell with commodity-related sectors weighing the most. The only S&P 500 industry sector in the black was utilities .SPLRCU, which is often bid when government bond yields seem unattractively low.

The combination of worries about slowing Chinese and global growth and the prospect of higher U.S. borrowing costs have weighed on markets for weeks, although concern about the potential impact on economic health has many in markets thinking the Fed won't begin to tighten just yet.

However, others expect the Fed to raise rates as a confirmation that the U.S. economy is in a strong enough position to not warrant emergency measures from the central bank.

"Because of the volatility in the market and the conflicting data points on the U.S. economy it is really difficult to get a firm handle on what the Fed's likely to do," said David Spika, global investment strategist for the GuideStone Funds in Dallas.

The Dow Jones industrial average .DJI fell 62.13 points, or 0.38 percent, to 16,370.96, the S&P 500 .SPX lost 8.02 points, or 0.41 percent, to 1,953.03 and the Nasdaq Composite .IXIC dropped 16.58 points, or 0.34 percent, to 4,805.76.   Continued...

 
Traders work on the floor of the New York Stock Exchange shortly after the opening of the markets in New York September 14, 2015.  REUTERS/Lucas Jackson