US close: Markets fall as Fed hints at rate hikes
Wall Street stocks finished lower on Wednesday, after the minutes from the latest Federal Reserve policy meeting suggested more interest rate hikes are on the way.
Dow Jones I.A.
38,460.92
04:30 15/10/20
Nasdaq 100
17,526.80
12:15 24/04/24
The Dow Jones Industrial Average fell 0.67% to 24,797.78, the S&P 500 lost 0.55% to 2,701.33, and the Nasdaq 100 slipped 0.3% to 6,759.26.
In the minutes from the Federal Open Market Committee’s January meeting, members revised their December economic forecasts upwards from December.
And despite not raising target rates at the meeting - chair Janet Yellen’s last - they did clearly suggest that the path ahead was for higher interest rates.
“A majority of participants noted that a stronger outlook for economic growth raised the likelihood that further gradual policy firming would be appropriate,” the summary of the minutes read.
It said almost all participants saw inflation hitting the Federal Reserve’s 2% goal in the medium term, as growth remained above trend and the labour market retained its strength.
Following the release of the minutes came two fresh official readings on wages and prices, with hourly wages increasing 2.9 and the consumer price index ahead an unexpectedly strong 0.5%.
Both of those numbers only added to the Fed-induced volatility in the final hours of trade.
Earlier in the session, macro data showed continued strength in the US economy, with IHS Markit's flash manufacturing purchasing managers' index for February rising to a three-and-a-half-year high of 55.9 from 55.5, while a similar services barometer posted a climb from 53.3 to 55.9.
"Business activity growth accelerated markedly in February, suggesting the economy is growing at its fastest pace for over two years," said Chris Williamson, chief business economist at IHS Markit.
"Even faster growth is signalled for coming months."
Elsewhere, existing-home sales came in at a seasonally adjusted annual pace of 5.38m in January, according to the National Association of Realtors, as sales of previously-owned homes slid 3.2% in January.
It was the second consecutive monthly decline, with sales as a whole coming in 4.8% lower than twelve months earlier, the steepest annual decline in more than three years.
"Realtors in most areas are saying buyer traffic is even stronger than the beginning of last year," said Lawrence Yun, NAR's chief economist.
However, "sales failed to follow course and far lagged last January's pace.”
“It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth."
In corporate news, Dish Network was off 3.12% despite posting a big rise in fourth-quarter profit.
Retailer Walmart was off 2.75%, seemingly continuing on from heavy losses in the previous session when it reported a weaker-than-expected fourth-quarter profit.
Foot Locker gained 0.52% after saying late on Tuesday that it was lifting its quarterly cash dividend and cutting its yearly capital expenditure programme.
LendingClub lost 5.57% after its fourth-quarter adjusted earnings and sales released late on Tuesday fell short of analysts' expectations.
Dow Jones - Risers
McDonald's Corp. (MCD) $158.64 0.54%
JP Morgan Chase & Co. (JPM) $115.19 0.44%
American Express Co. (AXP) $97.48 0.30%
United Technologies Corp. (UTX) $129.18 -0.06%
Caterpillar Inc. (CAT) $155.22 -0.22%
Boeing Co. (BA) $352.24 -0.31%
Apple Inc. (AAPL) $171.07 -0.45%
Goldman Sachs Group Inc. (GS) $263.40 -0.56%
International Business Machines Corp. (IBM) $153.96 -0.77%
Intel Corp. (INTC) $45.94 -0.82%
Dow Jones - Fallers
Walmart Inc. (WMT) $91.52 -12.66%
Verizon Communications Inc. (VZ) $47.96 -4.37%
Coca-Cola Co. (KO) $43.34 -3.65%
Merck & Co. Inc. (MRK) $54.55 -3.09%
Procter & Gamble Co. (PG) $80.21 -2.86%
Johnson & Johnson (JNJ) $129.91 -2.43%
Exxon Mobil Corp. (XOM) $74.89 -2.16%
Home Depot Inc. (HD) $183.06 -1.95%
3M Co. (MMM) $232.18 -1.90%
Travelers Company Inc. (TRV) $138.53 -1.86%
S&P 500 - Risers
Noble Energy Inc. (NBL) $29.13 10.84%
Advance Auto Parts (AAP) $114.00 8.21%
Mosaic Company (MOS) $27.46 7.98%
Mattel Inc. (MAT) $17.02 3.34%
Expeditors International Of Washington Inc. (EXPD) $63.99 3.33%
Robert Half International Inc. (RHI) $57.56 2.44%
United Rentals Inc. (URI) $171.93 2.31%
Verisk Analytics Inc. (VRSK) $99.23 2.26%
American Airlines Group (AAL) $52.78 2.05%
Gap Inc. (GPS) $32.22 1.95%
S&P 500 - Fallers
Walmart Inc. (WMT) $91.52 -12.66%
Devon Energy Corp. (DVN) $30.55 -11.85%
Newfield Exploration Co (NFX) $23.20 -10.42%
Campbell Soup Co. (CPB) $42.87 -6.97%
Carmax Inc. (KMX) $60.95 -5.40%
Murphy Oil Corp. (MUR) $25.17 -5.30%
Iron Mountain Inc (New) (IRM) $31.46 -5.16%
Newell Brands Inc (NWL) $26.83 -4.96%
Chesapeake Energy Corp. (CHK) $2.64 -4.69%
Garmin Ltd. (GRMN) $61.88 -4.62%
Nasdaq 100 - Risers
Verisk Analytics Inc. (VRSK) $99.23 2.26%
American Airlines Group (AAL) $52.78 2.05%
Hasbro Inc (HAS) $99.07 1.33%
Liberty Interactive Corporation QVC Group (QVCA) $28.16 1.15%
Marriott International - Class A (MAR) $141.96 1.08%
Facebook Inc. (FB) $177.91 1.08%
Henry Schein Inc. (HSIC) $68.68 1.04%
Amazon.Com Inc. (AMZN) $1,482.92 0.99%
Take-Two Interactive Software Inc. (TTWO) $108.54 0.99%
Alphabet Inc. Class A (GOOGL) $1,113.75 0.92%
Nasdaq 100 - Fallers
Dish Network Corp. (DISH) $43.18 -3.12%
Nvidia Corp. (NVDA) $241.51 -3.04%
Cadence Design Systems Inc. (CDNS) $39.26 -2.27%
Lam Research Corp. (LRCX) $189.23 -2.18%
Vertex Pharmaceuticals Inc. (VRTX) $157.89 -1.92%
O'Reilly Automotive Inc. (ORLY) $247.69 -1.86%
Walgreens Boots Alliance, Inc. (WBA) $69.63 -1.81%
T-Mobile Us, Inc. (TMUS) $59.42 -1.80%
Kraft Heinz Co. (KHC) $67.47 -1.78%
Regeneron Pharmaceuticals Inc. (REGN) $317.51 -1.71%