Stock Indexes Up Moderately As Fed Decision Nears

U.S. stock indexes stayed positive Wednesday in late morning trade, as the stock market awaited the Federal Reserve’s decision on interest rates.


The Nasdaq opened off 0.2%, quickly wiped out the loss to rise 1.1%, and then backed off to a 0.8% gain. Large gaps and blue chips stayed close with gains in the S&P 500 and Dow Jones industrial average at 0.9%. The small-cap Russell 2000 lagged with a 0.3% pop.

Volume was tracking lower on both major exchanges on the stock market today — no surprise given caution around the Fed’s expected statement.

The Fed will announce its rate decision at 2 p.m. ET. CME Group’s FedWatch Tool pegs the odds for a quarter-point rate hike at 78.4% vs. 21.6% for no change.

Calls For Pause

On Tuesday, President Trump tweeted, “I hope the people over at the Fed will read today’s Wall Street Journal Editorial before they make yet another mistake.” The Journal called for “a prudent pause” in rate hikes. IBD issued its call for a pause in a Dec. 7 editorial. “With no real signs of inflation, put rate hikes on hold,” the IBD editorial urged.

Some market watchers blame Fed Chairman Jerome Powell for the stock market’s trouble since early October. Powell said Oct. 3 that interest rates were a “long way from neutral.” The market’s decline began at that point. Powell walked back his remark on Nov. 28, saying that rates were “just below” neutral. But most of the damage was already done.

Leaders In Stock Indexes

Stocks leading the pack in late-morning trade included Nasdaq 100 component Netflix (NFLX), up 3% in volume, 35% above average; Dow Jones component Caterpillar (CAT), up 3% in below-average volume; and S&P 500 member Diamondback Energy (FANG), up 7% in volume 75% above normal.

On Tuesday, Diamondback announced a 50% dividend hike and an increase in capital spending. The stock is trading about 32% off its high.

Among IBD’s 197 industry groups, the day’s leaders included oil groups and RVs. Losers included the airfreight group and defensive issues such as soda and tobacco.


Will Federal Reserve Deliver A Santa Claus Rally?

Marijuana Stocks In 2019: Year Of Reckoning

How To Invest After A Stock Market Correction

Source link

Originally posted 2019-09-19 23:28:32.


No comments.

Leave a Reply

error: Content is protected !!