US close: Stocks step sideways as dollar remains limp post-Fed
US markets drifted sideways on Thursday, as the dollar remained limp while investors pondered a rattled Federal Reserve’s policy statement and combed through more earnings.
The Dow Jones Industrial Average fell 0.1% to 19,871.23, the S&P 500 was down 0.09% to 2,277.40 and the Nasdaq was 0.09% weaker to 5,638 at 1539 GMT.
The Fed stood pat on rates on Wednesday and sounded a positive note on the economic outlook, with some commentators musing that we may not see three rate hikes this year, as had recently been expected.
Dollar weakness seems likely to continue, given the way the US dollar was trading on the day, said analyst Chris Beauchamp at IG, "rallies in the greenback continue to be sold, as investors realise that there is still a long way to go before the next US rate increase".
Naeem Aslam at Think Markets said the Fed had been shaken by Donald Trump's unpredictable and bold actions, even losing its grip on rate decisions to the new President.
"Trump has clearly voiced that he sides with a weaker dollar, and after the appointment of the Supreme Court’s judge, the next big appointment will be the Fed chairperson. Janet Yellen will be leaving next year, however, there are two posts which will need to be refilled this year."
"Despite not being able to replace the Fed chairperson yet, Trump could place one of his desired people in one of the available positions with the goal that this person would then go on to occupy Yellen’s seat when she leaves. This would be a major shakeup in the Fed committee because that person needs to have a dovish tone to weaken the currency which would be more in line with Trump’s view.
"So for now, we think it may be safe to say that Donald Trump is holding the wild card when it comes to the interest rate decision, and the Fed has lost its grip."
Overnight the dollar fell to its lowest level against the euro since 8 December and by the end of the US session had bounced slightly to 1.0760.
However, on the Bank of England's positive Super Thursday the dollar was up roughly 1% against the pound to 0.1.2530, but was 0.4% weaker against the yen at 112.869.
On the data front, initial jobless claims fell 14,000 to 246,000 in the week ended 28 January, beating consensus forecast of 250,00.
For the week earlier, claims were revised up to 260,000 from an initial estimate of 259,000. Claims for unemployment benefits have now remained below 300,000 for 100 consecutive weeks.
Meanwhile, oil prices were not moving much, with West Texas Intermediate down 0.4% to $53.64 and Brent crude almost flat at $56.79 per barrel.
Gold on the Comex gained 1.13% to $1,222 per troy ounce on the back of continued weakness in the US dollar, dovish interpretations of yesterday’s Fed statement and some Trump-risk-related haven flight.
In corporate news, baby milk group Mead Johnson jumped more than 20%, putting it on track for its best daily gain ever on news of a takeover by British consumer goods firm Reckitt Benckiser for $16.7bn.
Philip Morris puffed higher on well-received fourth-quarter results.
Facebook was well liked as it reported a better than expected set of numbers for their latest quarter, with the headline number coming in at $1.41c a share, with revenues also beating expectations.
Ralph Lauren shares slid sharply on as CEO Stefan Larsson dismounted from the polo-wear fashion group after less than two years with a $10m settlement following disagreements with the eponymous founder.
Merck was up after its fourth-quarter numbers topped analysts’ expectations.
US-listed shares of Deutsche Bank dropped 4.45% after the German lender posted a €1.9bn net loss for the fourth quarter, falling short of expectations as legal costs took their toll.
Amazon reported earnings after the closing bell, beating on the bottom line with $1.54, but $43.7bn revenues short of analysts projection for $44.7bn.
Snap Inc, the parent of the Snapchat social photo app, publicly confirmed its plans for an initial public offering, with the float expected to value the company at $20-25bn, according to the Wall Street Journal.
Dow Jones - Risers
Merck & Co. Inc. (MRK) $64.18 3.35%
Cisco Systems Inc. (CSCO) $31.18 2.23%
Chevron Corp. (CVX) $112.24 1.09%
Travelers Company Inc. (TRV) $117.62 0.94%
Wal-Mart Stores Inc. (WMT) $66.70 0.71%
McDonald's Corp. (MCD) $123.21 0.65%
Exxon Mobil Corp. (XOM) $83.45 0.61%
Procter & Gamble Co. (PG) $87.76 0.49%
Intel Corp. (INTC) $36.68 0.44%
Coca-Cola Co. (KO) $41.40 0.34%
Dow Jones - Fallers
Caterpillar Inc. (CAT) $93.77 -1.41%
Unitedhealth Group Inc. (UNH) $160.75 -1.20%
Boeing Co. (BA) $162.26 -1.04%
Microsoft Corp. (MSFT) $63.17 -0.64%
Walt Disney Co. (DIS) $110.62 -0.62%
3M Co. (MMM) $174.17 -0.57%
JP Morgan Chase & Co. (JPM) $84.59 -0.42%
Nike Inc. (NKE) $52.79 -0.41%
Home Depot Inc. (HD) $136.95 -0.36%
American Express Co. (AXP) $76.51 -0.33%
S&P 500 - Risers
Mead Johnson Nutrition Co. (MJN) $84.38 21.41%
United States Steel Corp. (X) $34.85 11.24%
Citrix Systems Inc. (CTXS) $74.95 5.21%
Macy's Inc. (M) $30.72 5.17%
EQT Corp. (EQT) $63.84 5.08%
Southwestern Energy Co. (SWN) $9.32 4.95%
Boston Scientific Corp. (BSX) $25.10 4.76%
Ameriprise Financial Inc. (AMP) $117.90 4.26%
Alcoa Corporation (AA) $37.68 3.92%
Costco Wholesale Corp. (COST) $168.15 3.89%
S&P 500 - Fallers
Ralph Lauren Corp (RL) $76.61 -12.32%
E*TRADE Financial Corp. (ETFC) $34.25 -8.86%
Edwards Lifesciences Corp. (EW) $89.73 -8.46%
Ryder System Inc. (R) $71.86 -7.75%
Snap On Inc. (SNA) $166.99 -7.39%
Biogen Inc (BIIB) $264.23 -6.20%
International Paper Co. (IP) $53.35 -5.58%
MetLife Inc. (MET) $51.46 -5.27%
Charles Schwab Corp. (SCHW) $39.17 -5.25%
Ball Corp (BLL) $73.32 -4.19%