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Wall St.   ended slightly lower as investors digest Fed, earnings

US stocks ended slightly lower on Thursday as the market digested the potential for an interest rate hike in December and some disappointing tech earnings reports.

The Federal Reserve, which kept rates unchanged at its policy meeting that ended Wednesday, downplayed concerns about global growth and indicated confidence in the US job market' s recovery.

Stocks had jumped on Wednesday following the Fed statement and, after a strong run from the end of September, were due for a " reprieve," said Jason Ware, chief investment officer at Albion Financial, in Salt Lake City.

" I would just say that we had a big move and this is a bit of a cooling pause the next day," Ware said.

The three indexes are on track for their best month in four years.

S & P utilities .SPLRCU, which tend to do worse when interest rates are rising, were the worst-performing S & P sector, off 0.6 percent.

The Dow Jones industrial average .DJI fell 23.72 points, or 0.13 percent, to 17,755.8, the S & P 500 .SPX lost 0.94 points, or 0.04 percent, to 2,089.41 and the Nasdaq Composite .IXIC dropped 21.42 points, or 0.42 percent, to 5,074.27.

The three indexes recovered much of the day' s losses late in the session.

Stocks were " treading water" after the Fed statement, said John Mousseau, executive vice president at Cumberland Advisors in Sarasota, Florida.

" Low interest rates have been the anchor for stock prices for a while," Mousseau said.

Odds of a December hike increased to 50 percent from 43 percent on Wednesday, according to the CME Group' s FedWatch program.

The S & P healthcare sector rose 0.4 percent, making it the top-performing sector, as Allergan' s shares (AGN.N) shot up 6 percent to $ 304.38. The Botox maker confirmed it was in buyout talks with Pfizer (PFE.N). Pfizer dropped 1.9 percent.

Sixty percent of the S & P 500 companies have reported quarterly results so far. Analysts now expect overall third-quarter profit to decline a modest 1.7 percent, compared with the 4.2 percent drop forecast on Oct. 1, according to Thomson Reuters data.

NXP Semiconductors (NXPI.O) sank 19.7 percent to $ 73 after its bleak forecast. The slide took down other chipmakers, with the broader semiconductor index .SOX down 3 percent.

F5 Networks Inc (FFIV.O) shares fell 9.3 percent to $ 110.08 after a disappointing outlook, making it the biggest percentage loser in the S & P 500 technology index .SPLRCT.

GoPro (GPRO.O) slumped 15.2 percent to $ 25.62 after the action camera maker posted disappointing results.

Declining issues outnumbered advancing ones on the NYSE by 1,852 to 1,185, for a 1.56-to-1 ratio on the downside on the Nasdaq, 1,820 issues fell and 959 advanced for a 1.90-to-1 ratio favoring decliners.

The S & P 500 posted 28 new 52-week highs and 6 lows the Nasdaq recorded 102 new highs and 76 new lows.

About 7 billion shares changed hands on US exchanges, about even with the 7.1 billion daily average for the past 20 trading days, according to Thomson Reuters data.

 

 

October 29, 2015 : 7:12 AM 

Federal Reserve policy makers said they will consider tightening policy at their next meeting in December, without making a commitment to act this year, as the economy continues to expand at a " moderate" pace.

Even with a slower pace of recent job gains, " labour market indicators, on balance, show that under utilisation of labor resources has diminished since early this year," the Federal Open Market Committee said in a statement Wednesday following a two-day meeting in Washington.

The Fed removed a line from September' s statement saying that global economic and financial developments " may restrain economic activity somewhat," saying Wednesday only that the central bank is monitoring the international situation. The committee also added a reference to the possibility of increasing the rate " at its next meeting " based on" realised and expected " progress in reaching goals.

" The Fed is clearly signaling that the default plan is to raise rates in December," said Dean Maki, chief economist at Point72 Asset Management in Stamford, Connecticut. " It signals that something needs to prevent them from hiking in December rather than that something needs to happen for them to raise. "

Treasuries fell after the announcement as investors marked up the possibility of tightening this year. The yield on the benchmark 10-year note was at 2.09% at 3.30pm in New York compared with 2.04% late Tuesday.

Data-Dependent

Chair Janet Yellen and her colleagues have been watching for more labour-market improvement and signs that inflation is rising toward their goal, despite headwinds from overseas, as they debate the first rate increase since 2006.

At last month' s meeting, 13 of 17 officials still expected a hike this year provided the economy grew as forecast.

Yellen will address the House Financial Services Committee on Nov. 4 on regulatory matters, though members may ask questions that include her outlook for the economy and policy.

" This opens the door a bit wider to a December rate hike, if the data cooperate," said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh.

The FOMC vote was 9-1, as Richmond Fed President Jeffrey Lacker dissented for a second straight meeting, again calling for a quarter percentage-point rate increase.

Held Steady

The assessment of the labour market said the pace of job gains " slowed and the unemployment rate held steady," in a downgrade from last month' s language citing " solid job gains and declining unemployment." The US added 142,000 jobs in September, less than the 200,000 economists in a Bloomberg survey had forecast and well below the 205,000 average for the first eight months of 2015.

Household spending and business fixed investment have been " increasing at solid rates in recent months," the Fed said, compared with September' s language that those indicators have " been increasing moderately."

The Fed reiterated that it expects inflation to rise gradually toward its 2% goal in the medium term.

Officials have held the benchmark overnight federal funds rate target in a zero-to-0.25 percent range since December 2008.

Investors before Wednesday' s statement saw a roughly 35 percent chance of a move in December, as of 11.20am in Washington, based on pricing in fed funds futures that assumes a 0.375% effective funds rate after liftoff. That shifted to around 46% after investors digested the statement.

Low Inflation

Subdued inflation has been a hurdle for the central bank as it moves closer to a rate increase. Even as the jobless level has fallen to 5.1%, close to policy makers' 4.9% estimate of full employment, inflation has remained well below the committee' s 2 % goal. The Fed' s preferred gauge of prices rose by just 0.3% in the 12 months through August.

In contrast, continued labor-market improvement has been a bright spot for the Fed as it looks to fulfill its dual mandate of maximum employment and stable prices.

Several important readings on the economy will be released later this week, including the initial estimate of third-quarter growth on Thursday. Economists surveyed by Bloomberg News estimated expansion slowed to a 1.6% annualised pace, from 3.9% in the previous three months.

The global outlook has proved another stumbling point for policy makers as they assess if the US economy is strong enough to handle a rate rise.

China Slowdown

A slowdown in China has helped to push down commodity prices, which is contributing to low inflation, while still-subdued economic performance in trading partners including Japan and the euro area have driven up the value of the dollar and cut into US exports.

" They seem to have really stepped back from the statement in September about the global economic and financial developments," said Hoffman. " That' s a major step back from the degree of concern that would have an impact on the US economy. Now they are just monitoring it. "

 

 

Wall Street climbs as Fed puts December rate hike in play

US stocks ended sharply higher on Wednesday after a volatile session as the Federal Reserve gave a vote of confidence in the US economy by signaling a December interest rate hike was still on the table.

S & P financials, which benefit from higher borrowing rates, shot up following the Fed statement and led sector gains. The financial index .SPSY ended up 2.4 percent, its biggest percentage gain in seven weeks. The KBW Nasdaq regional bank index .KRX jumped 4.1 percent .

S & P utilities .SPLRCU, which tend to do worse when interest rates are rising, fell 1.1 percent and led S & P sector declines.

The Fed left rates unchanged, as expected, and, in a direct reference to its next meeting, put a December rate hike firmly in play. It also downplayed global economic headwinds in its statement.

Stocks initially sold off following the statement, with the S & P 500 erasing close to a 1 percent gain, but quickly rebounded to end at the day' s highs as investors saw the statement as a sign the Fed has confidence the US economy can sustain a rate hike.

" Obviously the first move (in stocks) is down, which is conventional wisdom. However, I do like the idea of ​ ​ the Fed having more confidence in the economy, less concerned about the global backdrop and willing to ring the bell on the long- term health of the US economy with a rate hike, " said Michael Marrale, head of research, sales and trading at ITG in New York.

The Fed has not raised rates in nearly a decade.

The Dow Jones industrial average .DJI rose 198.09 points, or 1.13 percent, to 17,779.52, the S & P 500 .SPX gained 24.46 points, or 1.18 percent, to 2,090.35, its highest in more than two months.

The Nasdaq Composite .IXIC added 65.55 points, or 1.3 percent, to 5,095.69, while the Nasdaq 100 index of biggest non-financial names .NDX rose 0.9 percent to 4,678.57, just shy of a 15-year high.

A 4.1 percent gain in Apple' s shares to $ 119.27 also helped support indexes a day after stronger-than-expected results.

The company sold 48 million iPhones in the latest quarter and posted a near doubling of revenue from China, allaying concerns about its business in the world' s second-largest economy.

On the flip side, Twitter (TWTR.N) shares fell 1.5 percent to $ 30.87 while Akamai Technologies (AKAM.O) dropped 16.7 percent to $ 62.91, Both reported disappointing results late Tuesday.

The S & P energy sector .SPNY snapped a three-day losing streak, ending up 2.2 percent, after a sharp rally in crude oil prices LCOc1 CLc1.

After the bell, shares of GoPro (GPRO.O) dropped 15.2 percent to $ 25.62 following its results.

Advancing issues outnumbered declining ones on the NYSE by 2,428 to 645, for a 3.76-to-1 ratio on the upside on the Nasdaq, 2,252 issues rose and 605 fell for a 3.72-to-1 ratio favoring advancers.

The S & P 500 posted 35 new 52-week highs and six new lows the Nasdaq recorded 155 new highs and 82 new lows.

About 8.5 billion shares changed hands on US exchanges, well above the 7.1 billion daily average for the past 20 trading days, according to Thomson Reuters data.

 

 

Most Asian Shares Lower on Fed Jitters, Energy Sector
28 October 2015 12:01

Markets in Asia were mostly lower Wednesday, after oil prices slid to two-month lows and investors stayed cautious before the Federal Reserve concludes a two-day policy meeting.

Hong Kong' s Hang Seng Index was down 0.7%, and the Shanghai Composite lost 0.9%. Chinese energy shares fell in Hong Kong, with China Shenhua Energy Co. and China Petroleum & Chemical Corp. both down roughly 2.5%.

South Korea' s Kospi was off 0.4%. Australia' s S & P ASX 200 was down 0.2%, with energy shares on the benchmark 1% lower.

Santos Ltd. fell 3.4% and Woodside Petroleum Ltd. was 3.6% lower.

Meanwhile, Japan' s Nikkei Stock Average was up 0.6%, amid expectations that the Bank of Japan will introduce more easing later in the week.

Shares in the region have been lackluster this week, before the Fed concludes its two-day policy meeting on Wednesday. Although the central bank is widely expected to leave benchmark interest rates unchanged near zero, investors will parse the Fed' s post-meeting statement for clues about the path of its monetary policy.

" Markets are at a tipping point, hesitant of rallying further ahead of what the Fed and BOJ do," said Angus Nicholson, a market analyst at brokerage IG. " People do not want to put on big positions ahead of the two events. "

Comments from the European Central Bank last week about possible easing in December sparked a rally across global equities, just before China' s central bank cut interest rates late on Friday.

The MSCI Asia Pacific closed Tuesday just off its highest level since mid-August. The benchmark, up 9.7% month-to-date, is on track for its largest monthly percentage gain since April 2009.

Overnight, US stocks mostly fell as oil prices slumped and investors await the outcome of the Fed' s meeting.

The Japanese yen was last at ¥ 120.36, roughly flat compared with its close in Asia on Tuesday. The currency traded as strong as ¥ 120.14 against the dollar a day earlier, after news that a US Navy ship sailed near artificial islands in the China South Sea claimed by China sent investors toward haven assets.

In Australia, shares of National Bank of Australia Ltd. were down 2.1%, after the firm unveiled a deal to sell control of its life-insurance business and plans to exit its UK business early next year. The firm also said its full year net profit rose 20% to 6.34 billion Australian dollars ($ 4.56 billion).

Shares of Alibaba Group Holding Ltd. jumped 4.1% in New York, after the Chinese e-commerce giant reported a net profit for its fiscal second quarter ended Sept. 30 of $ 3.57 billion, more than seven times what it reported a year earlier, thanks largely to a one-off gain of $ 2.93 billion from the revaluation of a stake in Alibaba Health Information Technology.

The company also sounded a positive note about the Chinese economy. Alibaba Executive Vice Chairman Joe Tsai said wage growth and considerable savings would empower consumers even as the world' s No. 2 economy slows to its lowest rate of growth since 2009.

Brent crude oil was flat at $ 46.79 a barrel. US oil prices fell 2.3% overnight, on expectations that US crude stockpiles grew for the fifth straight week last week.

Gold was up 0.2% at $ 1,168.20 a troy ounce.

 

 

 

Wall St. slips on rate uncertainty Apple up after the bell

US stocks slipped on Tuesday on uncertainty over the US rate outlook and disappointing results from Ford and other companies.

Upbeat results from Apple (AAPL.O) after hours, however, could give the market a boost on Wednesday.

Shares of Apple, the biggest company by market capitalization, rose 2.8 percent to $ 116.89 after it reported higher-than-expected earnings and revenue. Apple' s stock ended the regular session down 0.6 percent at $ 114.55.

Nasdaq 100 e-mini futures NQc1 also edged up after Apple' s results.

" Both earnings and revenues were above expectations, which I think was well embraced based on the fact that a lot of companies have been struggling on the top line," said Daniel Morgan, senior portfolio manager at Synovus Trust Company, which owns Apple shares.

Also after the bell, shares of Twitter (TWTR.N) dropped 11 percent to $ 27.89 after it reported results. Twitter' s stock ended the regular session up 1.5 percent at $ 31.34.

During the regular session, Ford (FN) dropped 5 percent to $ 14.89 after quarterly results missed expectations, while JetBlue Airways Corp (JBLU.O) fell 3.2 percent to $ 25.36 after it said it will make less money per mile in October than it did a year ago.

Shares of other airlines also fell, and the Dow Jones transportation average .DJT dropped 2.6 percent.

The Federal Reserve began its two-day policy meeting on Tuesday. While expectations for a rate hike this week are slim, investors are looking for clues in its policy statement on Wednesday as to when the Fed will begin to raise interest rates.

" That' s going to be parsed every way possible," said Bucky Hellwig, senior vice presidentat BB & T Wealth Management in Birmingham, Alabama.

Casting more doubts on whether the Fed will raise rates this year, data showed US non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, slipped last month after a downwardly revised decline in August.

The Dow Jones industrial average .DJI fell 41.62 points, or 0.24 percent, to 17,581.43, the S & P 500 .SPX lost 5.29 points, or 0.26 percent, to 2,065.89 and the Nasdaq Composite .IXIC dropped 4.56 points, or 0.09 percent, to 5,030.15.

Alibaba (BABA.N) rose 4 percent to $ 79.44 after the e-commerce giant reported better-than-expected revenue.

Declines in crude oil weighed further on energy shares, and the S & P energy index .SPNY, down 1.2 percent, led sector declines for the S & P 500.

Healthcare was one of two S & P 500 sectors to end in positive territory for the day. The index .SPXHC was up 1.7 percent after better-than-expected earnings from top drugmakers Pfizer (PFE.N) and Merck (MRK.N).

Rite Aid (RAD.N) shares jumped 42.6 percent to $ 8.67. Sources said Walgreens Boots Alliance Inc (WBA.O) is nearing a deal to buy the company.

NYSE declining issues outnumbered advancing ones 2,293 to 797, for a 2.88-to-1 ratio on the Nasdaq, 2,003 issues fell and 820 advanced, for a 2.44-to-1 ratio favoring decliners.

The S & P 500 posted 14 new 52-week highs and 13 new lows the Nasdaq recorded 56 new highs and 122 new lows.

About 7.3 billion shares changed hands on US exchanges, compared with the 7.2 billion daily average for the past 20 trading days, according to Thomson Reuters data.