US close: Stocks rally as Fed hints at possible rate hike in December
US stocks rallied on Wednesday, after the Federal Reserve signalled its intention to keep interest rates unchanged but hinted a hike would be possible at the December meeting.
The Dow Jones Industrial Average closed up 198 points to 17,779.52, while the S&P 500 and the Nasdaq closed 24 and 39 points higher respectively.
The Fed opted to keep interest rates unchanged at 0.25%, as most analysts' expected, and left the door open to an increase in December.
The US central bank downplayed global economic headwinds in its statement on the decision, which was made after a two-day policy meeting, saying that it was monitoring developments abroad.
"We see this statement as a clear attempt by the FOMC to keep December on the table," analysts at Barclays said.
"In some sense, any softer of a statement would likely have pushed December out of consideration as the Fed would likely be hesitant to raise rates with very low market-implied probabilities of policy action."
Trade gap narrows
On the economic data front, the US trade gap in goods narrowed more than expected in September to reach a seven-month low, figures released on Wednesday showed.
According to official government data, the trade gap in goods, excluding services, declined 13% month-on-month to $58.6bn compared with analyst expectations for a $64.3bn figure.
"We continue to see a large drag from private inventory investment as trimming headline growth, but with a smaller drag from net trade and more modest equipment investment, the composition of third quarter GDP is likely to be more balanced," said analysts at Barclays.
Meanwhile, the Mortgage Bankers Association said its seasonally-adjusted index of application activity, which covers home purchase demand and refinancing demand, declined 3.5% in the week ended 23 October.
Apple gains, Twitter disappoints
In company news, Apple climbed 4.12% after the iPhone and iPad maker said late on Tuesday that its fourth quarter profit surged 31%.
“Regardless of the worries markets might have about Chinese growth this has not negatively affected sales of iPhones to the Asian powerhouse as once again Apple have been able to post much better figures that had been expected,” said IG’s senior market analyst Alastair McCaig.
There was less positive news for Twitter, however, with the social media giant sliding 1.50% after delivering a lower-than-expected outlook late on Tuesday, when it also reported its active user growth was smaller than expected.
Akamai Technologies slumped 16.7% after its quarterly results missed expectations, while chocolate maker Hershey had bitter news for investors, as it reported a 31% drop in earnings ahead of the bell, which dragged shares down 4.07%.
Newly-listed Ferrari fell 4.09% despite reporting a rise in profit and revenue, while Walgreens Boots Alliance tumbled 10.7%, despite swinging to a profit in the fourth quarter, as earnings beat forecast.
Sector peer Rite Aid dropped 7.04% after agreeing to a takeover from Walgreens worth $17.2bn in cash.
The majority of Asian stocks were firmly in the red on Wednesday, while European stocks rebounded from the previous session’s dip and were mostly higher.
The dollar rose 1.044% against the euro and gained 0.33% and 0.57% against the pound and the yen respectively, while gold futures declined 0.84% to $1,157.05.
Oil prices surged, with West Texas Intermediate climbing 6.03% to $45.97 a barrel and Brent crude rising 4.59% to $49.05 a barrel.
S&P 500 - Risers
Genworth Financial Inc. (GNW) $5.27 +10.25%
L-3 Communications Holdings Inc. (LLL) $125.63 +9.67%
Boston Scientific Corp. (BSX) $18.40 +9.39%
CBRE Group Inc (CBG) $37.59 +8.99%
Fluor Corp. (FLR) $47.21 +7.35%
Tenet Healthcare Corp. (THC) $31.84 +7.28%
Starwood Hotels & Resorts Worldwide Inc. (HOT) $79.56 +6.35%
Total System Services Inc. (TSS) $54.73 +5.96%
Noble Energy Inc. (NBL) $34.84 +5.64%
Northrop Grumman Corp. (NOC) $190.45 +5.45%
S&P 500 - Fallers
Akamai Technologies Inc. (AKAM) $62.82 -16.85%
Verisk Analytics Inc. (VRSK) $72.62 -9.60%
Hershey Foods Corp. (HSY) $88.25 -6.45%
Edison International (EIX) $61.22 -4.91%
Owens-Illinois Inc. (OI) $21.75 -4.02%
FLIR Systems Inc. (FLIR) $26.01 -3.67%
CH Robinson Worldwide Inc (CHRW) $68.01 -2.83%
Automatic Data Processing Inc. (ADP) $87.91 -2.68%
PPL Corp. (PPL) $33.40 -2.62%
Gilead Sciences Inc. (GILD) $108.13 -2.55%
Dow Jones I.A - Risers
Apple Inc. (AAPL) $119.28 +4.13%
Merck & Co. Inc. (MRK) $55.11 +3.07%
JP Morgan Chase & Co. (JPM) $65.49 +2.91%
Goldman Sachs Group Inc. (GS) $191.36 +2.71%
Chevron Corp. (CVX) $89.78 +2.37%
Caterpillar Inc. (CAT) $71.97 +2.24%
International Business Machines Corp. (IBM) $140.82 +2.15%
E.I. du Pont de Nemours and Co. (DD) $63.37 +2.13%
Visa Inc. (V) $78.86 +1.73%
Exxon Mobil Corp. (XOM) $82.25 +1.43%
Dow Jones I.A - Fallers
Procter & Gamble Co. (PG) $76.49 -1.04%
Home Depot Inc. (HD) $123.86 -0.49%
Boeing Co. (BA) $147.88 -0.39%
General Electric Co. (GE) $29.40 -0.20%
Nasdaq 100 - Risers
PACCAR Inc. (PCAR) $53.73 +4.94%
Avago Technologies Ltd. (AVGO) $127.09 +4.61%
Wynn Resorts Ltd. (WYNN) $67.32 +4.28%
Apple Inc. (AAPL) $119.28 +4.13%
Vimpelcom Ltd Ads (VIP) $4.05 +3.85%
Broadcom Corp. (BRCM) $52.65 +3.17%
Dish Network Corp. (DISH) $63.64 +2.88%
Discovery Communications Inc. Class C (DISCK) $27.68 +2.75%
Biomarin Pharmaceutical Inc. (BMRN) $113.69 +2.69%
Netflix Inc. (NFLX) $105.80 +2.65%
Nasdaq 100 - Fallers
Akamai Technologies Inc. (AKAM) $62.82 -16.85%
Walgreens Boots Alliance, Inc. (WBA) $84.95 -10.73%
Verisk Analytics Inc. (VRSK) $72.62 -9.60%
CH Robinson Worldwide Inc (CHRW) $68.01 -2.83%
Automatic Data Processing Inc. (ADP) $87.91 -2.68%
Gilead Sciences Inc. (GILD) $108.13 -2.55%
Expeditors International Of Washington Inc. (EXPD) $49.45 -2.00%
American Airlines Group (AAL) $45.85 -1.31%
Baidu Inc. (BIDU) $172.54 -0.76%
Vertex Pharmaceuticals Inc. (VRTX) $120.10 -0.75%