While you were sleeping: Wall St slides from record highs

Wall Street weakened, declining from record highs, as investors assessed the impact of the Federal Reserve's intentions to raise interest rates once more this year.

On Wednesday, at the end of a two-day meeting, the Federal Open Market Committee flagged that it still plans another rate hike in 2017. It also announced it would start unwinding its balance sheet next month.

"The meeting was definitely more hawkish than what the market was anticipating," Mary Ann Hurley, vice president in fixed income trading at DA Davidson in Seattle, told Reuters. "We were definitely not pricing in another rate hike for this year."

Interest rate futures are now pricing in a 75% chance of a December increase, up from about 56% at the start of the Fed meeting on Wednesday, according to CME's FedWatch tool.

"Clearly the Fed doesn't have answers on the 2017 low inflation weakness but they're still very sensitive to falling behind the curve so they want to stay in front of the inflation curve," Michael Dowdall, investment strategist at BMO Global Asset Management, told Reuters.

Wall Street retreats 
At the close of trading in New York, the Dow Jones Industrial Average fell 53.36 points, or 0.2%, to 22,359.23. The Nasdaq Composite Index declined 0.5% to 6422.69 and the Standard & Poor's 500 Index slid 0.3% to 2500.60.

Earlier in the day, the Dow briefly touched a record high of 22,412.59.

The Dow fell as declines in shares of Procter & Gamble and those of Apple, down 1.9% and 1.7% respectively, outweighed gains in shares of General Electric and those of Goldman Sachs, up 1.4% and 0.9% respectively.

In the latest US jobs data, a Labour Department report showed initial claims for state unemployment benefits unexpectedly fell for the week ended September 16, with a drop of 23,000 to a seasonally adjusted 259,000. A Labor Department official said hurricanes Harvey and Irma affected claims for Texas and Florida, according to Reuters.

Separately, a Philadelphia Fed report showed its manufacturing index rose to 23.8, the highest reading in three months and up from 18.9 in August.

In the latest corporate deal news, shares of Calgon Carbon rocketed 62% after it agreed to be acquired by Japan's Kuraray for $US1.1 billion.

In Europe, the Stoxx 600 Index added 0.3%. Germany's DAX Index also rose 0.3%, France's CAC 40 Index climbed 0.5% and the UK's FTSE 100 Index fell 0.1%.

Gold, copper, iron ore and other metals slid amid the spectre of a US interest rate increase as well as Standard & Poor's downgrade of China's credit rating.

(BusinessDesk)