Wall Street falls as jittery investors await Fed meet

US stocks were lower at the open on Monday as a weary market awaited this week's Federal Reserve meeting that will decide on an interest rate increase.

Stocks are expected to remain volatile in the run-up to the policy meeting on Wednesday and Thursday.

"The uncertainty is so high in regard to the announcement ... it leaves investors a little bit paralyzed 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.

At 9:40 a.m. ET (1340 GMT), the Dow Jones industrial average was down 56.39 points, or 0.34%, at 16,376.7, the S&P 500 was down 5.52 points, or 0.28%, at 1,955.53 and the Nasdaq Composite was down 1.91 points, or 0.04%, at 4,820.44.

Nine of the 10 major S&P sectors were lower with the energy index's 1.19% fall leading the decliners.

Oil prices fell more than 1.5% on the prospect of dwindling demand, though reduced U.S. drilling, as measured by a rig count, offered some support. Exxon's 1% fall weighed the most on the Dow and the S&P.

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

Stocks have been volatile for the past few weeks 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% in more than 10 sessions since Aug. 20.

Wall Street closed higher last week with the S&P 500 and Nasdaq composite posting their biggest weekly gain since July.

The Fed has said it will raise rates when it sees a sustained economic recovery with special emphasis on the job market and inflation.

U.S. data released last week has painted a mixed picture, further clouding the outlook for what the Fed will decide to do this week.

Apple shares were up 1.9% at $116.30 after the company said its iPhone pre-orders were on track to beat last year's first-weekend record.

Alibaba Group Holding fell 2.4% to $63.02 after Barron's said the company's shares could lose another 50% of their value.

Solera Holdings, jumped 9% to $53.94 after the company said it agreed to be acquired by an affiliate of private equity firm Vista Equity Partners for $3.74 billion.

Declining issues outnumbered advancing ones on the NYSE by 1,714 to 911. On the Nasdaq, 1,285 issues fell and 951 advanced.

The S&P 500 index showed one new 52-week high and three new lows, while the Nasdaq recorded 15 new highs and 17 new lows.

 

(Reporting by Tanya Agrawal; Editing by Don Sebastian)