(For a Reuters live blog on U.S., UK and European stock
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* American Express (AXP), IBM (IBM) rise on strong results
* GE drops as supply-chain woes hit Q4 revenue
* Indexes down: Dow 0.7%, S&P 1.6%, Nasdaq 2.6%
(Adds comments, details; updates prices)
By Bansari Mayur Kamdar and Devik Jain
Jan 25 (Reuters) - U.S. stock indexes fell on Tuesday as a
selloff in technology firms ahead of the Federal Reserve's
policy meeting overshadowed upbeat results from blue-chip
companies including IBM (IBM) and Johnson & Johnson (JNJ).
The S&P 500 index had briefly declined as much as
10.6% from its Jan. 3 closing peak, flirting with a correction
for the second time this year before clawing back some lost
ground in early afternoon trading.
The index is now down 9.7% from its peak. A correction would
be confirmed if the index closes 10% or more below its record
closing level.
The Fed will announce its policy statement on Wednesday at
2:00 pm ET (1900 GMT), which will be watched closely for cues on
the central bank's timeline for hiking key interest rates to
combat inflation.
Fed funds futures traders are pricing in a 25 basis points
hike in March, in addition to three more rate increases by the
end of the year.
"The market is being re-rated by investors as they consider
changes in Fed policy, earnings growth and economic growth
slowing from last year," said Nancy Tengler, chief investment
officer of Nashville-based asset manager Laffer Tengler
Investments.
"We've had three years of super return and now we're just
seeing investors going in and adjusting their portfolio."
At 12:23 p.m. ET, the Dow Jones Industrial Average
was down 255.11 points, or 0.74%, at 34,109.39, the S&P 500
was down 71.15 points, or 1.61%, at 4,338.98, and the
Nasdaq Composite was down 355.49 points, or 2.57%, at
13,499.64.
Ten of the 11 major S&P 500 sectors declined, with energy
stocks being the outlier thanks to a 2.6% gain in oil
prices as Ukraine-Russia tensions sparked supply concerns.
A U.S. plane carrying military equipment and munitions
landed in Kyiv earlier in the day to shore up Ukraine as it
braces for a possible military offensive from Moscow.
"With risks around Ukraine to keep lingering and the Fed set
to confirm a significantly more hawkish stance, volatility is
likely to remain elevated near term," said Thomas Hempell, head
of macro & market research, Generali Investments.
"As the global recovery continues and corporate earnings
grow further (if more slowly), the recent correction will
ultimately offer buying opportunities."
The fourth-quarter earnings season has started off on a
mixed note, with all eyes now on mega-cap growth company
Microsoft's (MSFT) earnings after market close on Tuesday,
followed by Apple (AAPL) and Tesla later this week.
Earnings from S&P 500 companies are expected to grow 24.1%
year-over-year, according to IBES estimates from Refinitiv.
Dow components American Express (AXP) and IBM (IBM)
gained 7.4% and 3.5%, respectively, after posting strong
fourth-quarter results.
Johnson & Johnson (JNJ) rose 2.2% after the drugmaker
forecast as much as $3.5 billion in sales of its COVID-19
vaccine in 2022.
General Electric Co tumbled 6.6% after the
industrial conglomerate reported a decline in quarterly revenue
amid persistent global supply chain disruptions.
Declining issues outnumbered advancers by a 2.57-to-1 ratio
on the NYSE and a 2.74-to-1 ratio on the Nasdaq.
The S&P index recorded 2 new 52-week highs and 4 new lows,
while the Nasdaq recorded 9 new highs and 102 new lows.
(Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru;
Editing by Shounak Dasgupta, Maju Samuel and Aditya Soni)
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