While you were sleeping: China, Fed hike weigh on stocks

Wall Street edged higher, while US Treasurys rose, amid fresh data showing the strength of the US economy and the weakening of growth in China.

Shares of Apple fell 3.2% after Credit Suisse downgraded its projection for Apple's earnings for 2016 and lowered its iPhone6 sales forecasts for next year amid concern about demand.

Fresh data from China underpinned concern about the nation's slowing growth at a time the US Federal Reserve is considering its first interest rate hike in almost a decade.

A National Bureau of Statistics report showed China's consumer price index increased a lower-than-expected 1.3% in October from a year earlier, following a 1.6% gain in September.

"The key driver today is probably China," Mohit Kumar, head of interest-rate strategy at Credit Agricole's corporate and investment bank unit in London, told Bloomberg.

"Another factor is the concern that every other central bank is likely to be dovish, particularly as there is no inflation pressure. In that scenario, the Fed being hawkish would be detrimental for equities as well as the dollar."

A Reuters survey of more than 80 economists published on Tuesday showed a 70% median chance the Fed would raise its benchmark overnight interest rate at its December 15-16 policy meeting.

On Wall Street, the Dow Jones Industrial Average rose 27.73 points, or 0.16%, to 17,758.21. The Standard & Poor's 500 Index added 0.15% to 2081.71 while the Nasdaq Composite Index dropped 0.2% to 5083.24..

Other tech stocks to decline included Intel (down 0.4%) and Microsoft (down 1.2%). 

US Treasurys rose, pushing the yield on 10-year notes three basis points lower to 2.32%.

A US Labor Department report showed import prices fell 0.5% in October, after a 0.6% decrease in September. And the slide is set to continue, some say.

"We expect import prices to decline further over the medium term as the effects of past dollar appreciation continue to weigh on prices," Rob Martin, an economist at Barclays in New York, told Reuters.

"In addition, we believe that weakness in emerging Asia, especially China, is likely to push down import prices over and above any effect from the appreciation of the dollar."

A separate report from the Commerce Department showed wholesale inventories rose 0.5% in September, following an upwardly revised 0.3% increase in August.

Shares of Gap dropped, last 4.5% lower, after the retailer reported disappointing preliminary quarterly earnings.

In Europe, the Stoxx 600 Index ended the session with a 0.1% gain from the previous close. Germany's DAX Index added 0.2%. France's CAC 40 Index eked out a 0.02% advance. The UK's FTSE 100 Index fell 0.3%.

In commodities, US crude oil is up 0.8% to $US44.21 a barrel in New York futures trading, while gold is steady at $US1088.20 an ounce. 

Updated for Wall Street close at 10am (NZ time).

(BusinessDesk)