Amidst the highly anticipated Federal Reserve meeting, trading sessions have been choppy for the S&P 500 stock index. The benchmark S&P 500 stock index had risen as little as 1.1 percent during the early part of the session but erased its gains as U.S. Senate Majority Leader Mitch McConnell said that the Democrats trashed his spending bill proposal. This could become the source of fear for the risk of a government shutdown.
In addition to the shutdown threat, there is an upcoming Federal Open Market Committee that started on Tuesday. During this two-day meeting, market participants expect the benchmark U.S. rates to be higher this month because of the Fed. However, many investors believe that there will be fewer rate hikes in 2019 compared to previous expectations from the U.S. central bank.
While Monday for S&P 500 was a 14-month low, Dow Jones and the Nasdaq had slight gains. Thanks to momentum stocks FAANG as well as Boeing Co.
Among those that contributed to the huge decline in the S&P 500 were energy stocks that fell 2.4 percent due to rumors of oversupply as indicated by the sudden decrease in U.S. crude prices by as much as 7 percent.
Despite energy stocks decreasing, Boeing Co (BA.N) experienced a 3.8-percent increase, especially while implementing increases in its dividends and share buy backs by as much as $20 billion from a previous $18 billion.
Other companies posted slight gains too. The collective group of giant companies known as FAANG has gained around the range of 1.3 percent and 3.1 percent. FAANG stands for Facebook (FB.O), Amazon.com Inc (AMZN.O), Apple Inc. (AAPL.O), Netflix Inc. (NFLX.O), and the parent of Google – Alphabet Inc. (GOOGL.O).
While the S&P 500 plummeted, other indices had noticeable slight increases. The Dow Jones Industrial Average (.DJI) registered an increase of 0.35 percent or 82.66 points, and the Nasdaq Composite (.IXIC) saw an increase of 0.45 percent, equivalent to 30.18 points.
Many stocks posted a slight increase, but the truth is that there were overall losses. Boeing Co (BA.N) rose by 3.8 percent by it saw losses for the past three days. Goldman Sachs Group Inc. (GS.N) had a 2.1-percent increase but suffered nine days of losses previously. Johnson & Johnson (JNJ.N) rose 1.0 percent, but that was after it dropped by almost 13 percent when Reuters reported that Johnson & Johnson Baby Powder had asbestos.
Those that went down outnumbered those that advanced on the NYSE by a ratio of 1.14 to 1. In the same way, the decliners prevailed in the Nasdaq with a ratio of 1.43 to 1. Overall, the Nasdaq recorded 523 new lows in contrast with a mere eight new highs.
The S&P 500 was the worst with no new highs in 52 weeks while there were 87 new lows.
Amidst the depressing financial times, the U.S. exchanges registered a volume of 9.18 billion shares. This is higher than the 8.06 billion-average that prevailed for the past 20 trading days.
However, as to the options market, they continue to expect more volatility in the next few days. In fact, the Cboe Volatility Index (.VIX) finished an almost 10-month high at 1.06 points.