US open: Stocks decline after mixed company earnings

US stocks were down due to mixed company earnings from McDonald’s, General Electric, and Honeywell International, while investors looked ahead to speeches by the Federal Reserve's Daniel Tarullo and John Williams.

At 1514 BST, the Dow Jones Industrial Average was down 0.55% to 18,062.02 points, the S&P 500 fell 0.37% to 2,133.34 points and the Nasdaq declined 0.08% to 5,237.81 points.

Oil prices were mixed as Russia said it was committed to joining an OPEC-led production cut. Investors would be looking towards Baker Hughes rig count data at 1800 BST.

West Texas Intermediate was down 0.317% at $50.47 a barrel but Brent crude was up 0.058% at $51.41 at 1417 BST.

Shares in fast-food giant McDonald's rose 2.85% at 1459 BST after it posted third quarter revenue of $6.42bn before the opening bell, which was down from last year, but exceeded estimates of $6.28bn.

Net income was $1.28bn, or $1.50 a share, down from $1.31bn, or $1.40 per share, for the same third quarter.

General Electric’s shares were down 2.03% at 1459 BST after the industrialist was forced to cut its sales growth forecast for the year due to falling demand in a sluggish economy.

Profit for the third quarter rose 6.7%, but revenue missed on analyst expectations for revenue, which was $29.27bn, short of $370m, but was an 4.4% increase from the same quarter last year.

Conglomerate Honeywell International reported better-than-expected third quarter earnings but weak sales.

Sales rose 2% to $9.61bn, missing analysts’ expectations of $9.78bn as net income was $1.24bn, or $1.60 earnings per share, down from $1.26bn or $1.62, last year.

Shares in tobacconist Reynolds American soared 15.31% at 1456 BST after British American Tobacco said they intend to buy the remaining stake in the company it does not own.

Meanwhile, Fed governor Daniel Tarullo is due to give a speech at a Columbia Law School Conference in New York at 1515 BST, while San Francisco president John Williams is due to speak at the Federal Home Loan Bank’s member conference at 1930 BST.

Naeem Aslam, chief markets analyst, at ThinkMarkets, said: “Over in the US, things are less gloomy as investors are more focused what the message will be from the Fed with respect to interest rate hike. San Francisco Fed president, John Williams, will present his views about the market and the potential of the Fed increasing the interest rate is presenting headwinds.

“Yesterday we have seen the existing the home sales data soaring once again and this has given a clear signal that the housing market is strengthening further- a sign of real confidence for the economy.”

Connor Campbell, a financial analyst at Spreadex, said the Dow Jones Industrial Average dropped 100 points after the bell, due to the “increasing certainty that Hilary Clinton will be elected the next president of the United States come December and the subsequent strength this has leant the dollar, which took 0.3-0.5% off both the pound and the euro”.