US close: Stocks finish lower as Fed minutes point to more rate hikes
Wall Street finished as it started - in the red - on Wednesday, following the release of the latest Federal Reserve minutes and after solid gains in the previous session.
Dow Jones I.A.
38,239.66
04:30 15/10/20
Nasdaq 100
17,718.30
12:15 26/04/24
The Dow Jones Industrial Average ended down 0.36% at 25,706.68, the S&P 500 was 0.03% weaker at 2,809.21, and the Nasdaq Composite was 0.04% softer at 7,642.70.
Minutes from the Federal Open Market Committee’s meeting in September were released late in the session, with officials seeming sure of their current course to gradually hike interest rates.
The notes showed that members retained confidence in America’s economic growth, but did express some reticence about the potential impact of tariffs in president Donald Trump’s ongoing trade spat with China.
“With regard to the outlook for monetary policy beyond this meeting, participants generally anticipated that further gradual increases in the target range for the federal funds rate would most likely be consistent with a sustained economic expansion, strong labor market conditions, and inflation near 2% over the medium term,” the minutes stated.
The committee did unanimously approve a 0.25% hike in the Fed’s interest rate targets in September - the latest in a series of moves to be met with the disapproval of the president, who voiced his concern over higher interest rates on Tuesday.
In an interview with Fox Business News, Trump called the interest rate increases his “biggest threat”, saying of Fed chair Jerome Powell that he was “not happy with what he’s doing … it’s going too fast”.
On the data front, US housing starts fell by more-than-expected last month, dragged lower by those for homes containing five or more family units.
According to the Department of Commerce, housing starts declined at a 5.3% month-on-month clip in September to reach an annualised rate of 1.201m, short of the 1.218m reading forecast by economists.
August's print was revised lower as well, from a preliminary reading of 1.282m to 1.268m.
Single-family housing starts declined by 0.9% on the month to 871,000, but multi-family starts were off by 12.9% at 324,000.
Building permits, a closely-watched lead indicator of activity in the sector, also fell back, shrinking by 0.6% to 1.241m against consensus expectations for 1.280m, and were left standing 1.0% below their level in September 2017.
In corporate news, Netflix shares climbed 5.28% after the company topped third-quarter estimates for subscriber growth and earnings overnight.
CMC Markets analyst Michael Hewson said: "Having made the mistake of overestimating subscriber growth numbers in Q2, and missing by 1m it would appear that management erring on the side of caution for Q3 has seen the opposite happen, as the company added a record 6.96m new subscribers in Q3 well above the 5m expected."
"Profits also surged coming in at $0.89c a share well above the $0.68c expected, while revenues came in as expected at $4bn.
“The beat on profits was helped by an increase in operating margins to 12%, as well as a tax benefit on repatriated foreign earnings.”
IBM, which also turned in its third-quarter results overnight, slumped 7.63% after the company posted a bigger-than-expected decline in third-quarter revenue.
Elsewhere, motorhome manufacturer Winnebago Industries racked up 4.57% by the closing bell after the release of its fourth-quarter earnings.
Dow Jones - Risers
Goldman Sachs Group Inc. (GS) $228.28 6.07%
Johnson & Johnson (JNJ) $139.46 4.11%
Merck & Co. Inc. (MRK) $71.81 3.40%
Pfizer Inc. (PFE) $44.57 3.36%
JP Morgan Chase & Co. (JPM) $109.83 3.28%
Walt Disney Co. (DIS) $117.13 3.25%
Travelers Company Inc. (TRV) $126.44 2.47%
Procter & Gamble Co. (PG) $81.86 2.16%
Coca-Cola Co. (KO) $45.86 2.12%
3M Co. (MMM) $202.93 2.01%
Dow Jones - Fallers
International Business Machines Corp. (IBM) $134.05 -5.02%
Home Depot Inc. (HD) $185.17 -3.14%
Unitedhealth Group Inc. (UNH) $267.30 -1.81%
United Technologies Corp. (UTX) $130.21 -1.79%
Nike Inc. (NKE) $76.50 -1.32%
Apple Inc. (AAPL) $221.19 -0.43%
Caterpillar Inc. (CAT) $141.34 -0.32%
Microsoft Corp. (MSFT) $110.71 -0.26%
Intel Corp. (INTC) $45.89 -0.11%
Cisco Systems Inc. (CSCO) $45.94 0.26%
S&P 500 - Risers
Omnicom Group Inc. (OMC) $75.69 8.91%
Morgan Stanley (MS) $47.19 8.56%
Progressive Corp. (PGR) $70.63 6.63%
Goldman Sachs Group Inc. (GS) $228.28 6.07%
PerkinElmer Inc. (PKI) $90.16 5.33%
Netflix Inc. (NFLX) $364.70 5.28%
International Flavors & Fragrances Inc. (IFF) $138.23 5.01%
Edwards Lifesciences Corp. (EW) $148.63 4.82%
Delta Airlines Inc. (DAL) $54.31 4.75%
Amerisource Bergen Corp. (ABC) $93.76 4.71%
S&P 500 - Fallers
W.W. Grainger Inc. (GWW) $279.20 -12.16%
AutoZone Inc. (AZO) $714.71 -9.19%
Endo International Plc (ENDP) $17.05 -6.83%
Diamond Offshore Drilling Inc. (DO) $18.39 -5.45%
Northern Trust Corp. (NTRS) $94.21 -5.20%
International Business Machines Corp. (IBM) $134.05 -5.02%
Macy's Inc. (M) $31.84 -4.64%
Vulcan Materials Co. (VMC) $96.23 -4.58%
Advance Auto Parts (AAP) $159.58 -4.40%
Transocean Ltd. (RIG) $12.61 -4.18%
Nasdaq 100 - Risers
Netflix Inc. (NFLX) $364.70 5.28%
Workday, Inc. (WDAY) $137.25 2.28%
Starbucks Corp. (SBUX) $59.10 2.23%
Intuit Inc. (INTU) $218.83 1.82%
Asml Holdings N.V. (ASML) $185.01 1.81%
Kraft Heinz Co. (KHC) $56.40 1.73%
Henry Schein Inc. (HSIC) $86.47 1.65%
Mercadolibre Inc. (MELI) $313.37 1.55%
Qurate Retail Inc. (QRTEA) $22.26 1.50%
Ctrip.Com International Ltd. Ads (CTRP) $34.95 1.33%
Nasdaq 100 - Fallers
JD.com, Inc. (JD) $23.68 -3.86%
O'Reilly Automotive Inc. (ORLY) $334.78 -3.60%
CSX Corp. (CSX) $70.71 -2.06%
Micron Technology Inc. (MU) $42.35 -1.99%
Cintas Corp. (CTAS) $186.20 -1.95%
PACCAR Inc. (PCAR) $61.74 -1.91%
NetEase Inc. Ads (NTES) $221.01 -1.88%
Tesla Inc (TSLA) $271.78 -1.74%
J.B. Hunt Transport Services Inc. (JBHT) $112.20 -1.48%
Xilinx Inc. (XLNX) $77.72 -1.48%