US open: Stocks slide as FOMC interest rate decision edges closer

US equities declined on Monday as investors prepared for an expected interest rate hike by the Federal Reserve this week.

At 1423 GMT the Dow fell 1.76%, the Nasdaq dropped 2.22% and the S&P 500 dipped 1.96%.

The Federal Open Market Committee is forecast to raise interest rates by 25 basis points on Wednesday following a two-day policy meeting.

“At this stage, it is almost universally expected that, after a seven-year period at near-zero, the Fed will raise interest rates this Wednesday,” said Capital Economics.

“Like everybody else, we anticipate a 25 basis point increase in the target range for the fed funds rate, taking it to between 0.25% and 0.50%.”

Ahead of the big event, there is little in the way of economic data on Monday’s agenda to drive markets. The pace is set to pick up on Tuesday with the release of US inflation which is projected to show a year-on-year improvement in November of 0.5% year-on-year after a 0.2% gain the prior month.

Elsewhere, Asian stocks were mostly lower as traders shrugged off better-than-estimated Chinese data.

Chinese industrial production rose 6.2% in November from a year earlier, compared to the previous month’s 5.6% increase and expectations for a 5.7% gain, the National Bureau of Statistics revealed on Saturday.

Separately, the statistics agency said retail sales in the world’s second largest economy jumped 11.2% in November, beating the 11.1% forecast and following a 11% rise in October.

Meanwhile, oil prices continued to slide after the International Energy Agency forecast that the global supply glut was likely worsen next year dragged on prices. At 1429 GMT Brent crude fell 2.3% to $37.07 per barrel and West Texas Intermediate dropped 1.02% to $35.26 per barrel.

The dollar was down slightly against the euro by 0.01% and the Japanese yen by 0.18% but up by 0.61% versus the pound. Gold on the Comex decreased 0.36%.

In company news, shares in household goods maker Jarden surged on news it will merge with Newell Rubbermaid to create a company that will bring in $16bn in revenue.

Newell Rubbermaid slumped as it said it will pay Jarden shareholders $60 a share in cash and stock.

AstraZeneca’s US shares fell after the pharmaceuticals giant confirmed that it is exploring potential strategic options with biotech company Acerta Pharma.