US open: Stocks edge lower after Moody's cuts sovereign debt outlook

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US stocks were slightly lower on Monday morning in New York as investors treaded carefully ahead of a busy week for economic data, which included the latest reading on consumer price inflation.

Credit rating agency Moody's decision to lower its outlook on America's long-term debt to negative was also dragging on investor sentiment.

As of 1603 GMT, the Dow Jones Industrial Average was roughly flat at 34,275.38, helped by gains for jet-maker Boeing, while the S&P 500 had drifted lower by 0.2% to 4,405.91.

The Nasdaq Composite was off by 0.29% at 13,757.81, but had finished about 2% higher during the previous session.

In parallel, the yield on the benchmark 10-year U.S. Treasury note was was edging up by one basis point to 4.66%.

Congress had just four more days left to pass a new stop-gap bill before the current one runs out on 17 November. Speaker Mike Johnson unveiled a new proposal at the weekend to push funding into January, but measures faced opposition from both parties.

"Moody’s decision to shift the US credit rating outlook from stable to negative on Friday signalled a growing feeling that the country is becoming increasingly unstable under the weight of increased debt and ballooning repayment costs," said analyst Joshua Mahony from Scope Markets.

Inflation figures, due out at 0830 ET on Tuesday, were expected to show that core inflation was unchanged at 4.1% in October – still firmly above the Federal Reserve's 2% target.

Fed chair Jerome Powell – along with other policymakers – delivered somewhat hawkish comments to the public during the previous week, saying that the central bank wouldn't hesitate to tighten monetary policy further to bring inflation down towards the target.

"Last week we heard a slew of Fed members calling on the likely need for further hikes in order to drive inflation lower. While not all commentary was firmly hawkish, the key message across the week was that it was too early to declare victory on inflation and, as such, further tightening might still be needed," said analyst James Harte of Tickmill Group.

In company news, Boeing shares were flying 4% higher on reports that China might call an end to its four-year suspension of Boeing 737 Max airlines ahead of Joe Biden's meeting with Xi Jinping's at the APEC summit this week.

The airplane manufacturer also announced a batch of new orders from the sidelines of the Dubai airshow.

Dow Jones - Risers

Boeing Co. (BA) $205.34 4.41%
Verizon Communications Inc. (VZ) $36.05 0.84%
Procter & Gamble Co. (PG) $152.49 0.57%
Walt Disney Co. (DIS) $88.79 0.56%
Goldman Sachs Group Inc. (GS) $327.17 0.54%
Caterpillar Inc. (CAT) $241.05 0.53%
Chevron Corp. (CVX) $143.82 0.51%
Salesforce.Com Inc. (CRM) $214.85 0.50%
Travelers Company Inc. (TRV) $170.82 0.50%
Coca-Cola Co. (KO) $56.92 0.39%