US stocks retreat amid growth concerns as Fed meeting looms

NEW YORK (BLOOMBERG) - US stocks slipped as investors awaited next week's Federal Reserve meeting, with economic indicators pointing to uneven growth in the world's largest economy.

The S&P 500 Index fell 0.4 per cent to 2,138.2 at 9:33 a.m. in New York (9:33 p.m Singapore time), after rising Thursday for the first time in three sessions. Trading may be subject to unexpected swings Friday because of a quarterly event known as quadruple witching, when futures and options contracts on indexes and individual stocks expire.

S&P Dow Jones Indices will also implement its quarterly index rebalancing after the close, including the first reboot of S&P 500 group weights in almost two decades. That will separate real estate investment trusts from the financial industry, creating 11 top-level groups.

"We had a couple of weaker economic numbers yesterday, so that heightens concerns about the macro picture in the US," said Patrick Spencer, the London-based vice chairman of equities at Robert W. Baird. "The indexes are trading near all-time highs so some pullback isn't surprising, but the longer-term trends remain robust so any correction is expected to be limited."

After the European Central Bank and the Bank of England kept monetary policies unchanged, attention is turning to the Fed's meeting next week. The chances of a September rate increase have fallen to 20 per cent from 30 per cent a week ago, with December the first month with more than even odds of a hike.

A report today showed the cost of living in the US rose more than projected in August, indicating that inflation continues to move closer to the Fed's goal. Investors will assess a gauge on consumer confidence later this morning.

The S&P 500 last struck an all-time high on Aug. 15, following a 26-session run that brought 10 such records. The gauge has since lost 2 per cent. Equities whipsawed investors this week after a rout last Friday jolted markets out of their summer languor on concern that central banks are less willing to boost stimulus despite a persistently fragile global economy. A measure of stock volatility has surged toward its biggest monthly gain since August 2015.