Caterpillar, Nike Lead Dow; Fed Raises Rates; 10-Year Treasury Yield Falls | Stock News & Stock Market Analysis

One of the more telegraphed rate hikes in recent memory came to fruition Wednesday when the Federal Reserve raised its key lending rate to 1.25% to 1.5%.

The Fed also lifted its 2018 GDP outlook to 2.5% growth from 2.1%. It’s projecting three rate hikes next year.

X The stock market strengthened a bit on the news, with the Dow Jones industrial average and S&P 500 on pace for record closing highs, a common occurrence in recent days.

Caterpillar (CAT) and Nike (NKE) led the Dow higher, rising nearly 4% and 3%, respectively. Earnings from Nike are due Dec. 21 after the close. The athletic footwear and apparel maker has gotten its house in order after a lengthy period of sluggish price performance. Nike cleared a 57.35 cup-with-handle buy point and is well extended from it.

Small caps fared the best in late-afternoon trading, with the Russell 2000 up 0.8%. The Dow added 0.6%, the Nasdaq composite was up 0.4% and the S&P 500 gained 0.3%. Volume on the NYSE and Nasdaq was tracking close to Tuesday’s levels in the stock market today.

The 10-year Treasury yield eased 3 basis points to 2.37% on the heels of the Fed decision.

Among the day’s movers, Apple (AAPL) added 0.6% to 172.67 after the company said it will invest $390 million in fiber-optic name Finisar (FNSR), which makes laser chips for the iPhone X and AirPods. Apple has been holding gains nicely after a breakout over a 160.97 handle buy point. Finisar broke out of a downtrend Wednesday, soaring 22.5%.

Inside the IBD 50, several growth names outperformed, including RV maker Winnebago Industries (WGO). Shares jumped nearly 4% to 57 as the stock sits well extended from a 37.30 buy point cleared in September. Earnings are due Dec. 20 before the open. Leaderboard name PRA Health Sciences (PRAH) cleared a base with an 84.47 buy point, rising 4% to 88.09. China-based YY Inc. (YY) and Arista Networks (ANET) showed gains of more than 2%.

IBD 50 component Adobe Systems (ADBE) added 2% as it finds support at the 50-day moving average. It was featured as a potential call-option play in the latest Earnings Preview column. Earnings are due Thursday after the close.


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Originally posted 2017-12-17 17:40:49.


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