US equities finished near session highs on Wednesday following the FOMC's policy announcement, some mixed economic data and another round of earnings. Materials and Discretionary led the S&P 500 higher, while Energy was the only group to finish in the red. Crude oil and gold are both lower, as is the dollar which fell sharply against its major rivals.
As expected, the FOMC said they will continue the current pace of tapering by reducing bond purchases by and additional $10 billion per month to $45 billion. The FOMC will also leave fed funds rate unchanged at 0-0.25%. Equity markets popped to session highs on the news but retraced to previous levels within minutes.
Overseas, the Bank of Japan left monetary policy unchanged at today’s meeting. Inflation forecasts were also left unchanged from January despite some talk of an upward revision. However, the central bank did say economy expected to achieve 2% inflation around middle of three-year projection period and then gradually shift towards a stable growth path.
No meaningful developments surrounding the crisis in Ukraine, however Putin said on Tuesday that he sees no need to counter the latest round of sanctions from the West, though he said he could reconsider the participation of Western companies in Russia’s economy, including energy projects.
Market Indices/Statistics:
- Dow closed up 45.47 pts. / +0.28% to 16,580.84; 17 of the 30 Dow stocks closed higher.
- S&P closed up 5.62 pts. / +0.30% to 1,883.95; 9 of the 10 S&P 500 sectors closed higher.
- Nasdaq closed up 11.02 pts. / +0.27% to 4,114.56
- Materials were the strongest sector (+0.80%) Energy was the weakest sector (-0.01%)
- The VIX is down 0.30 at 13.41
- Gold is down 5.4 to 1290.9
- Oil is down 1.50 to 99.78
- Nat Gas is down 0.028 to 4.825
- Yen vs. Dollar is down 0.39 to 102.23
- Euro vs. Dollar is up 0.0058 to 1.3868
- The US Dollar Index (DXY) is down 0.31 to 79.51
Top Headlines:
In M&A news, Nuclear power producer Exelon Corp (NYSE:EXC, $35.03, -3.18%) said it would buy Pepco HoldingsInc. (NYSE:POM, $26.76, +17.42%) for $6.83 billion ($27.25 per share in cash) to create the biggest U.S. Mid-Atlantic electric and gas utility servicing about 10 million customers.
Shares of eBay Inc. (EBAY) fell 4.95% to $51.83 after more than 10 brokerage firms cut their price targets on the online retailer's stock a day after the company forecast lower-than-expected current-quarter earnings and said it took a $3 billion non-cash tax charge in the first quarter.
Level 3 Communications Inc. (NYSE:LVLT) rose 15.95% to $43.03 on Wednesday after the telecom network provider raised its forecast for 2014 adjusted EBITDA growth and free cash flow after reporting a much better-than-expected quarterly profit.
Coach Inc. (NYSE:COH) slipped 2.32% to $44.65 after Citi Investment Research downgraded its rating on the handbag retailer's stock to "neutral" from "buy", according to Theflyonthewall.com. On Tuesday, Coach reported a 21% drop in sales at North American stores open at least a year for the three months ended March 29, its fourth straight decline.
Earnings after the bell:
Boston Beer reports Q1 EPS $0.62 vs FactSet $0.70
Cabot Corp reports Q2 EPS $0.83 ex-items vs FactSet $0.84
Fleetmatics reports Q1 EPS $0.19 ex-items vs FactSet $0.16
Yelp reports Q1 EPS ($0.04) vs FactSet ($0.06)
Coming Thursday
U.S. Economic Reports:
Challenger Job Cuts (Apr) at 7:30am ET – prior 34.399K
Initial Jobless Claims (26-Apr) at 8:30am ET - consensus 320K, prior 329K
Continuing Claims (19-Apr) at 8:30am ET - consensus 2725K, prior 2680K
Personal Income (Mar) at 8:30am ET – consensus +0.5%, prior +0.3%
Personal Spending (Mar) at 8:30am ET – consensus +0.6%, prior +0.3%
Bloomberg Consumer Comfort (27-Apr) at 9:45am ET – prior (29.1)
PMI Manufacturing (Apr) at 9:45am ET – consensus 55.8, prior 55.4
ISM Manufacturing Index (Apr) at 10:00am ET – consensus 54.3, prior 53.7
Earnings Thursday:
BMO: American Tower (AMT); Airgas (ARG); Avon Products (AVP); Becton Dickinson (BDX); Ball Corp (BLL); BorgWarner (BWA); Cardinal Health (CAH); Cigna (CI); Clorox (CLX); CME Group (CME); CenterPoint (CNP); ConocoPhillips (COP); Fidelity National Information (FIS); Harman International (HAR); Host Hotels & Resorts (HST); Iron Mountain (IRM); Invesco (IVZ); Kellogg (K); L-3 Communications (LLL); Legg Mason (LM); MasterCard (MA); Marathon Petroleum (MPC); Motorola Solutions (MSI); Mylan (MYL); PG&E (PCG); Public Service (PEG); PPL Corp (PPL); Textron (TXT); Viacom (VIAB); Xcel Energy (XEL)
Exxon Mobil (XOM)
AMC: Apartment Investment (AIV); Akamai (AKAM); DaVita (DVA); Expedia (EXPE); Fluor (FLR); Kraft Foods (KRFT); Mohawk (MHK); Public Storage (PSA); Southwestern Energy (SWN); Integrys Energy Group (TEG); Vertex Pharmaceuticals (VRTX); Western Union (WU); Wynn Resorts (WU); XL Group (XL)
Here at the NYSE- Opening and Closing Bells
At the open:
On Thursday, May 1st, executives and guests of Brazil’s Banco Bradesco BBI will visit the New York Stock Exchange (NYSE). To mark the occasion,Bradesco BBI, joined by members of the company’s management team and some other executives, will ring the NYSE Opening Bell
At the close:
On Thursday, May 1st, CFA Institute, in collaboration with the New York Society of Security Analysts, will visit the New York Stock Exchange to highlight “Putting Investors First Month” which kicks off on May 1. Kurt Schacht, CFA will ring the NYSE Closing Bell®.
Please remember to check in with us every morning for the NYSE Morning Update!
Thanks and have a great evening!
