US close: Stocks mixed as Fed signals shift in policy approach
Wall Street finished mixed on Wednesday, as market participants sifted through the minutes of the Federal Reserve's latest policy meeting, which signalled a change in how the Fed would approach policy changes.
At the close, the Dow Jones Industrial Average was up 0.05% at 33,446.26 and the S&P 500 gained 0.15% to 4,079.95, while the Nasdaq Composite was 0.07% weaker at 13,688.84.
The Dow Jones closed 16.02 points higher on Wednesday, clawing back some of the losses recorded in the previous session.
Minutes from the Federal Open Market Committee’s most recent meeting were released late in the day, with officials signalling that the central bank’s easy policy would remain until stronger inflation and employment numbers were evident.
The FOMC noted that the Fed’s $120bn in monthly bond purchasing was providing the American economy with “substantial support”, and indicated that while the economy was heading in the right direction, there was still much progress to be made.
“Participants noted that it would likely be some time until substantial further progress toward the committee’s maximum-employment and price-stability goals would be realised and that, consistent with the committee’s outcome-based guidance, asset purchases would continue at least at the current pace until then,” the minutes read.
The inclusion of the term “outcome-based guidance” signalled a shift in policy for the Fed, which had previously indicated that it would move its policy based on inflation expectations.
FOMC members agreed that any change to the bank’s policy “should be based primarily on observed outcomes, rather than forecasts,” according to the minutes.
In focus earlier was news that the International Monetary Fund had raised its 2021 growth outlook for the global economy to 6%, up from January's forecast of 5.5%, giving sentiment a slight boost.
The IMF said that “a way out of this health and economic crisis is increasingly visible,” but did warn of “daunting challenges” given the varied pace of vaccine rollouts around the globe.
On the macro front, weekly mortgage applications decreased 5.1% week-on-week, according to the Mortgage Bankers Association, with an increase in the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances to 3.36% from 3.33% causing homeowners and potential homebuyers to hold off on borrowing for the time being.
Elsewhere, the US goods trade balance slipped from -$88.0bn to -$86.7bn in February, according to the Census Bureau and the Bureau of Economic Analysis, while the prior month was revised to -$68.2bn from $67.8bn.
In the corporate space, stocks reliant on an economic reopening were among the winners, with cruise operators Carnival up 1.4%, Royal Caribbean gaining 0.31% and Norwegian Cruise Line ahead 0.74%.
Closer to the atmosphere, air operators were mixed, with low-cost stalwart Southwest Airlines down 0.9% and legacy carrier American Airlines off 0.54%, while United Airlines managed to climb 0.15%.
Dow Jones - Risers
JP Morgan Chase & Co. (JPM) $154.93 1.57%
Apple Inc. (AAPL) $127.90 1.34%
Intel Corp. (INTC) $66.25 1.05%
Microsoft Corp. (MSFT) $249.90 0.82%
American Express Co. (AXP) $147.13 0.67%
Chevron Corp. (CVX) $104.19 0.59%
International Business Machines Corporation (CDI) (IBM) $134.93 0.53%
Merck & Co. Inc. (MRK) $76.12 0.44%
Travelers Company Inc. (TRV) $152.29 0.36%
Unitedhealth Group Inc. (UNH) $365.56 0.35%
Dow Jones - Fallers
Walt Disney Co. (DIS) $187.56 -1.14%
Boeing Co. (BA) $252.58 -1.02%
Dow Chemical Co. (DOW) $63.99 -0.94%
Cisco Systems Inc. (CSCO) $51.77 -0.49%
Nike Inc. (NKE) $136.54 -0.45%
Home Depot Inc. (HD) $312.47 -0.42%
Amgen Inc. (AMGN) $248.12 -0.39%
Honeywell International Inc. (HON) $218.50 -0.31%
Walgreens Boots Alliance, Inc. (WBA) $55.58 -0.22%
Walmart Inc. (WMT) $139.80 -0.21%
S&P 500 - Risers
L Brands Inc (LB) $64.29 3.63%
FMC Technologies Inc. (FTI) $7.88 3.01%
Jefferies Financial Group Inc. (JEF) $31.34 2.99%
Twitter Inc (TWTR) $68.99 2.97%
Essex Prty Trust Inc. (ESS) $282.83 2.53%
Helmerich & Payne Inc. (HP) $27.53 2.38%
Kohls Corp. (KSS) $61.34 2.23%
Facebook Inc. (FB) $313.09 2.23%
Hess Corp. (HES) $73.01 2.14%
Nvidia Corp. (NVDA) $565.74 2.03%
S&P 500 - Fallers
Albemarle Corp. (ALB) $143.70 -6.01%
PPG Industries Inc. (PPG) $147.97 -3.65%
Lamb Weston Holdings, Inc. (LW) $77.99 -3.62%
Illumina Inc. (ILMN) $400.55 -3.44%
Nektar Therapeutics (NKTR) $19.62 -3.11%
Freeport-McMoRan Inc (FCX) $33.98 -2.94%
Delta Airlines Inc. (DAL) $50.20 -2.81%
Sherwin-Williams Co. (SHW) $251.70 -2.80%
Ecolab Inc. (ECL) $214.66 -2.79%
Wynn Resorts Ltd. (WYNN) $132.68 -2.71%
Nasdaq 100 - Risers
Facebook Inc. (FB) $313.09 2.23%
Nvidia Corp. (NVDA) $565.74 2.03%
Amazon.Com Inc. (AMZN) $3,279.39 1.72%
Hasbro Inc (HAS) $97.19 1.48%
Qurate Retail Inc. (QRTEA) $11.92 1.45%
Alphabet Inc. Class A (GOOGL) $2,239.03 1.35%
Apple Inc. (AAPL) $127.90 1.34%
Alphabet Inc. Class C (GOOG) $2,249.68 1.12%
Intel Corp. (INTC) $66.25 1.05%
QUALCOMM Inc. (QCOM) $139.43 0.99%
Nasdaq 100 - Fallers
NetEase Inc. Ads (NTES) $103.39 -3.62%
Illumina Inc. (ILMN) $400.55 -3.44%
Trip.com Group Limited (TCOM) $38.81 -3.41%
Tesla Inc (TSLA) $670.97 -2.99%
JD.com, Inc. (JD) $81.25 -2.71%
Wynn Resorts Ltd. (WYNN) $132.68 -2.71%
Fastenal Co. (FAST) $49.93 -2.61%
Hologic Inc. (HOLX) $72.90 -2.44%
Incyte Corp. (INCY) $81.38 -2.16%
Baidu Inc. (BIDU) $222.00 -2.01%