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Stocks Rise Ahead Of Fed Vote: Big Blue Jumps On Upgrade

Stocks chalked up a positive start Wednesday, jumping to mild early gains as investors looked to this afternoon’s rate policy news from the Federal Reserve.




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KB Home (KBH) rose, while Nike (NKE) slipped after their quarterly reports. IBD Leaderboard stock Planet Fitness (PLNT) edged up further above its buy point. Volatility continued among marijuana stocks, with Tilray (TLRY) adding to Tuesday’s rebound.

The Nasdaq Composite led, rising 0.2% at the start of trade. The Dow Jones industrial average and the S&P 500 added 0.1% apiece. IBMIBM topped the Dow with a 2.1% gain, following an analyst upgrade.  (For updates on this story and other market coverage, visit the Stock Market Today.)

The Fed will take center stage for today’s stock market, with a rate policy announcement scheduled for 2 p.m. ET. A press conference with Fed Chair Jerome Powell will follow. Markets fully anticipate a quarter-point hike, which would place the target rate at 2% to 2.25%. How the Fed is viewing the potential impact to the U.S. economy from the U.S.-China trade war, and how this may affect future policy, will be central questions for the Fed chief.

Following the Fed’s previous rate increase, on June 14, the Nasdaq and S&P 500 posted modest gains, the Dow closed lower. After the Fed’s March 22 rate hike, the three indexes fell more than 2% apiece.

On The Dow: Nike Slips, IBM Upgraded

IBM topped the Dow, rising more than 2%. UBS upgraded the stock to buy, from neutral, citing positive data analytics and cloud businesses pointing to revenue gains in 2020. IBM shares are working to climb out of a nine-month correction.

Nike swooshed almost 3% lower. The sportswear giant’s late Tuesday report showed better-than-expected earnings and revenue growth in its fiscal first quarter, and a strong increase in North American sales. On the negative side, Nike reported rising marketing costs and a smaller than expected expansion in gross margins.

Nike shares opened in a buy range above an 81.10 flat base buy point.

CarMax Leaps After Earnings; Planet Fitness In Buy Range

KB Home trimmed its early gain to less than 1%. JMP Securities upgraded the stock to market outperform, from market perform, following mixed third-quarter results late Tuesday. Earnings growth easily topped analyst targets, but a 7% revenue gain missed expectations. The stock is up 10% since mid-August, and back above its 10-week moving average as it attempts to climb out of a nine-month correction.

Planet Fitness inched 0.2% higher, after clearing a flat base buy point at 53.41 in heavy trade on Tuesday, according to MarketSmith chart analysis. The stock is up 55% for the year. The third stage base means the stock will now move into late-stage territory.

CarMax (KMX) grabbed an early 4% gain, after announcing a 25% jump in fiscal second-quarter earnings and a 9% revenue gain, both above consensus targets. Shares of the auto dealership chain triggered the automatic sell rule on Monday, falling more than 8% below a flat base buy point at 81.77.

Other earnings results were less positive. Metals processor Worthington Industries (WOR) dived more than 7% after fiscal first quarter undercut analyst targets.  Hydraulic tools maker Actuant (ATU)  tumbled nearly 9%, after fiscal fourth-quarter results topped expectations, but first-quarter guidance did not.

Marijuana stocks were mixed after a rebound on Tuesday. Tilray rose almost 4% in early trade, after posting an 8% rebound on Tuesday. Shares had dived 54% in the three sessions through Monday, though still leaving shares up 482% from their July IPO price. Cannabis peers Canopy Growth (CGC) slipped less than 1%. Cronos Group (CRON) dropped 3%.

Europe, China Stock Markets Today: Oil Data Coming Up

Asia’s markets were back up and running after holidays interrupted trade early in the week. China’s stock markets today gained ground, with Hong Kong’s Hang Seng Index popping 1.2% higher as it reopened from a Tuesday holiday. In Japan, Tokyo’s Nikkei 225 added 0.4%, adding an eighth day to a rally that has brought it to within 4% of its January record.

Europe’s markets weakened in afternoon trade, as London’s FTSE 100 and Frankfurt’s DAX dipped to 0.2% losses. The CAC-40 in Paris defended a 0.2% gain.

Oil prices backed off after data released by the American Petroleum Institute late Tuesday showed a 2.9 million barrel increase in weekly oil inventories, counter to consensus forecasts for a 1.3 million barrel decrease. West Texas Intermediate dipped 0.6% to $71.82 a barrel. The Energy Information Administration releases official weekly supply data at 10:30 a.m. ET.

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