US open: Stocks dip as two-year yields hover near eight-year highs

Stocks are stuck in a bit of a rut as traders try to work out the implications of the US central bank's policy announcement the night before, despite a raft of better-than-expected readings on the economy.

At 1529 BST, the Dow Jones Industrial Average was 0.07% or 16.0 points lower to 22,397.21, alongside a dip of 0.26% or 6.57 points to 2,501.68 on the S&P 500 while the Nasdaq was 0.72% lower at 6,409.75.

Below the surface, and another slip lower in Apple aside, which was weighing on the S&P 500 and the tech-heavy Nasdaq, as a group Coal (2.26%), Railroads (1.92%) and Industrial Transportation (1.60%) stocks were doing best.

Acting as a backdrop, two-year US Treasury note yields - the most sensitive to expectations for Fed policy - were giving back one basis point to 1.43%, after Fed-inspired gains on Wednesday night that took them to their highest since November 2008.

Overnight, the Fed stood pat on interest rates, as expected, while Chair Janet Yellen confirmed the central bank will start winding down its $4.5trn balance sheet in October and suggested that one more rate increase is likely by the end of the year.

By and large, analysts appeared to be somewhat in agreement that the Federal Open Market Committee delivered a 'hawkish' surprise with regards to expectations for an interest rate hike next December, but a 'dovish' surprise in terms of its medium-term outlook.

Just as significantly, for her part at least, in her post-meeting press conference Fed chief Janet Yellen appeared to downplay the downtrend in core inflation year-to-date and appeared to put forth an explanation for the divergence between market-pricing for Fed hikes and rate-setters' own projections.

Commenting on the Fed's decisions, analysts at Goldman Sachs led by Jan Hatzius said: "The near-term message from the FOMC was hawkish, with 12 out of 16 participants projecting a third 2017 rate hike, upgrades to the GDP and employment forecasts, and continued skepticism from Chair Yellen about the significance of the weaker-than-expected core inflation numbers. We have consequently upgraded our subjective probability of a rate hike in December from 60% to 75%.

"[...] By contrast, the longer-term interest rate projections (2019 and beyond) surprised on the dovish side."

In economic news, the Philly Fed's regional manufacturing gauge jumped rose from a reading of 18.9 for August to 23.8 in September (consensus: 17.0).

To take note of as well, initial jobless claims fell by 23,000 to 259,000 during the week ending on 16 September, according to the Department of Labor.

On the corporate front, carbon materials group Calgon Carbon rocketed after the company agreed to be bought by Japanese chemical manufacturer Kuraray Co for $1.1bn.

Also high on the most active list on the Big Board, shares of Transocean and Seadrill were sharply lower, with the former having received a contract termination notice from Chevron for the Discoverer Clear Leader rig.

As was often the case, Bank of America was also one of the most actively traded issues, with the KBW sector gauge for lenders' shares up by 0.21% to 96.85.

AMD was also in the market spotlight as CNBC reported it was building a custom processor for Tesla's autonomous autopilot for cars.

Dow Jones - Risers

General Electric Co. (GE) $24.55 0.94%
Goldman Sachs Group Inc. (GS) $231.32 0.67%
United Technologies Corp. (UTX) $114.76 0.58%
JP Morgan Chase & Co. (JPM) $95.10 0.53%
Visa Inc. (V) $105.37 0.38%
Home Depot Inc. (HD) $159.22 0.34%
3M Co. (MMM) $211.06 0.26%
Boeing Co. (BA) $255.83 0.14%
McDonald's Corp. (MCD) $160.04 0.10%
Merck & Co. Inc. (MRK) $65.85 0.09%

Dow Jones - Fallers

Apple Inc. (AAPL) $153.79 -1.46%
Microsoft Corp. (MSFT) $74.26 -0.90%
Procter & Gamble Co. (PG) $93.57 -0.88%
Wal-Mart Stores Inc. (WMT) $80.05 -0.56%
Johnson & Johnson (JNJ) $132.56 -0.50%
Intel Corp. (INTC) $36.91 -0.43%
Verizon Communications Inc. (VZ) $49.27 -0.42%
Cisco Systems Inc. (CSCO) $32.52 -0.25%
Walt Disney Co. (DIS) $98.98 -0.23%
American Express Co. (AXP) $88.29 -0.16%

S&P 500 - Risers

Anadarko Petroleum Corp. (APC) $48.18 7.52%
Marathon Oil Corp. (MRO) $12.77 2.82%
Sl Green Realty Corp. (SLG) $100.40 2.74%
Public Service Enterprise Group Inc. (PEG) $46.34 2.45%
Devon Energy Corp. (DVN) $35.65 2.18%
Boston Properties Inc. (BXP) $123.02 1.85%
CF Industries Holdings Inc. (CF) $35.83 1.82%
Entergy Corp. (ETR) $79.21 1.81%
Sealed Air Corp. (SEE) $42.62 1.79%
Best Buy Co. Inc. (BBY) $53.47 1.68%

S&P 500 - Fallers

Transocean Ltd. (RIG) $9.26 -5.27%
United States Steel Corp. (X) $24.71 -4.19%
Southwestern Energy Co. (SWN) $5.80 -4.13%
Nvidia Corp. (NVDA) $178.59 -3.90%
First Solar Inc. (FSLR) $47.30 -3.17%
Diamond Offshore Drilling Inc. (DO) $13.43 -2.82%
Frontier Communications Co. (FTR) $11.72 -2.33%
Allergan plc (AGN) $205.15 -2.31%
Kroger Co. (KR) $20.33 -2.24%
Skyworks Solutions Inc. (SWKS) $101.36 -2.08%

Nasdaq 100 - Risers

Biomarin Pharmaceutical Inc. (BMRN) $93.97 1.51%
J.B. Hunt Transport Services Inc. (JBHT) $105.52 1.21%
Fastenal Co. (FAST) $44.92 0.81%
American Airlines Group (AAL) $45.69 0.59%
Comcast Corp. (CMCSA) $37.68 0.59%
Shire Plc Ads (SHPG) $154.18 0.51%
PACCAR Inc. (PCAR) $71.19 0.49%
Automatic Data Processing Inc. (ADP) $107.24 0.38%
Seagate Technology Plc (STX) $32.50 0.37%
Mondelez International Inc. (MDLZ) $40.49 0.20%

Nasdaq 100 - Fallers

Nvidia Corp. (NVDA) $178.59 -3.90%
JD.com, Inc. (JD) $42.85 -3.58%
Mercadolibre Inc. (MELI) $280.27 -3.42%
NetEase Inc. Ads (NTES) $276.68 -2.43%
Skyworks Solutions Inc. (SWKS) $101.36 -2.08%
Western Digital Corp. (WDC) $84.58 -2.07%
Expedia Inc. (EXPE) $140.35 -1.86%
Broadcom Limited (AVGO) $238.81 -1.69%
Charter Communications Inc. (CHTR) $360.98 -1.64%
Wynn Resorts Ltd. (WYNN) $143.35 -1.61%