Stocks take a step back
Markets ease after Dow turns in second-best day ever. Investors await Fed rate decision.
NEW YORK†(CNNMoney.com) -- Stocks slipped Wednesday morning as investors retreated following the previous session's massive rally and geared up for an expected rate cut from the Federal Reserve.
A jump in durable goods orders and better-than-expected results from Dow component Procter & Gamble took the edge off of early selling. But trading was likely to be choppy as investors awaited an announcement from the Fed at the end of its two-day policy meting.
The Commerce Department reported that durable goods orders unexpectedly jumped 0.8% in September. Economists had expected a decline of 1%, according to a consensus of projections from Briefing.com.
Government: The Federal Reserve concludes its meeting Wednesday. Investors widely expect the central bank to slash its key lending rate to as low as 1% amid the darkening economic outlook. The policy decision is due around 2:15 p.m. ET.
On Oct. 8, Fed policymakers cut rate half a point to 1.5%.
Also, at 10 a.m. ET, the House Ways and Means Committee will hold a hearing on Capitol Hill about economic recovery, job creation and investment in America.
World markets: Optimism about interest rates and bargain hunting helped stocks leap on Tuesday. The Dow surged 889 points, or nearly 11%. It was the blue-chip index's second-biggest one-day point gain ever.
Overseas markets extended the rally. Japan's Nikkei index finished Wednesday's session up 7.7% and most European shares rallied in morning trading.
Autos: Struggling automaker General Motors (GM, Fortune 500) said that it sold more than 2.1 million vehicles worldwide in the third quarter, down 11.4% from the year-ago quarter. GM blamed weakness in the North American market, where sales plunged 18.9%. The release comes amid a debate over whether Detroit's Big Three automakers should get a bailout from the federal government. Analysts are expected a loss of $3.47 per share, according to a consensus of opinion from Thomson FirstCall.
Companies: Kraft Foods (KFT, Fortune 500) reported a nearly 20% gain in revenue to $10.5 billion, though earnings were flat at 44 cents per share, excluding certain one-time items. Aided by sales of its relatively inexpensive food products, the company barely beat analyst estimates of 43 cents per share, according to a consensus of projections from Thomson FirstCall.
Procter & Gamble (PG, Fortune 500) reported a 9% gain in net sales growth to $22 billion, primarily from sales in its home and baby care divisions. The company reporteed a 12% gain in diluted net earnings to $1.03 per share. Analysts had expected $21.9 billion in revenue and earnings of 98 cents per share.