US open: Stocks trade lower following Fed decision
Wall Street stocks were in the red early on Thursday as market participants came to terms with the Federal Reserve's decision to hike interest rates by 75 basis points.
As of 1530 GMT, the Dow Jones Industrial Average was down 0.44% at 32,005.15, while the S&P 500 lost 0.85% to 3,727.58 and the Nasdaq Composite came out the gate 1.26% softer at 10,392.54.
The Dow opened 142.61 points lower on Thursday, extending losses recorded in the previous session.
Policymakers at the Fed unanimously nodded through their fourth consecutive outsized rate hike late in the day, adding 0.75% to its interest rate target, taking it to a range of 3.75% and 4% - the highest Federal Reserve target in 15 years.
The central bank did indicate that it will monitor any possible economic damage the rate rises could have in what it termed a "lag". However, chair Jerome Powell said it was still "very premature" to discuss a pause in rate hikes, but said given there were often long lags for the effects of monetary policy changes to be seen, the Fed might not wait for inflation to normalise completely before pausing its tightening.
Treasury yields spiked on the news, with the yield on the 2-year Treasury note hitting its highest level in 15 years, while the benchmark 10-year Treasury yield rose 13 basis points to 4.189%.
On the macro front, America's shortfall on trade with the rest of the world rose unexpectedly at the end of the third quarter. According to the Department of Commerce, in seasonally adjusted terms, the foreign trade deficit on goods and services jumped at a month-on-month pace of 11.6% to -$73.3bn.
Elsewhere, the number of Americans filing new claims for unemployment benefits fell by 1,000 to 217,000 in the week ended 29 October, according to the Labor Department, below forecasts for a print of 220,000 and pointing to ongoing tight labour market conditions.
On another note, the S&P Global services PMI contracted to 48.8 in October, slipping below the 50.0 threshold, while the composite PMI came in slightly better than expectations for a reading of 47.3 at 48.2 but down from the prior month's print of 49.5.
Still on data, activity in America's services sector grew a tad less quickly than anticipated in October, the results of a closely followed survey revealed, but price pressures grew. The Institute for Supply Management's services sector Purchasing Managers' Index slipped from a reading of 56.7 for September to 54.4 in October
Turning to factory orders, new orders for manufactured goods rose by 0.3% in September, according to the Census Bureau, picking up from the revised 0.2% uptick in the prior month and in line with market expectations.
Finally, US non-farm labour productivity and unit labour costs were a tad better behaved than expected during the third quarter. According to the US Department of Labor, the former increased at a quarterly annualised pace of 0.3% over the three months to September
In terms of earnings, Qualcomm and Roku were both in the red after issuing disappointing quarterly results and forward guidance, while drugmaker Moderna also traded lower on the back of weak Covid-19 vaccine sales outlook.
Reporting by Iain Gilbert at Sharecast.com
Dow Jones - Risers
Boeing Co. (BA) $156.12 5.91%
Caterpillar Inc. (CAT) $217.32 1.30%
McDonald's Corp. (MCD) $272.55 0.81%
Chevron Corp. (CVX) $179.75 0.70%
Intel Corp. (INTC) $27.60 0.66%
Nike Inc. (NKE) $90.55 0.28%
Unitedhealth Group Inc. (UNH) $544.87 0.26%
Walmart Inc. (WMT) $141.07 0.22%
3M Co. (MMM) $123.13 0.22%
JP Morgan Chase & Co. (JPM) $127.21 0.19%
Dow Jones - Fallers
Apple Inc. (AAPL) $140.07 -3.42%
Visa Inc. (V) $196.83 -2.05%
Home Depot Inc. (HD) $282.97 -1.99%
Cisco Systems Inc. (CSCO) $43.69 -1.99%
Walt Disney Co. (DIS) $99.85 -1.93%
American Express Co. (AXP) $140.82 -1.87%
International Business Machines Corporation (CDI) (IBM) $134.84 -1.45%
Microsoft Corp. (MSFT) $217.10 -1.36%
Procter & Gamble Co. (PG) $131.35 -1.20%
Dow Chemical Co. (DOW) $46.38 -1.17%
S&P 500 - Risers
Under Armour Inc. Class A (UAA) $8.11 14.30%
Under Armour, Inc. (UA) $7.09 13.44%
Ball Corp (BALL) $52.83 10.41%
Equinix, Inc. (EQIX) $587.95 7.05%
Air Products & Chemicals Inc. (APD) $262.42 7.04%
Boeing Co. (BA) $156.12 5.91%
Johnson Controls International plc (JCI) $60.32 5.62%
Royal Caribbean Cr (RCL) $52.35 5.42%
Marathon Oil Corp. (MRO) $31.31 5.21%
Apache Corp. (APA) $46.51 5.13%
S&P 500 - Fallers
Lincoln National Corp. (LNC) $35.08 -32.67%
Fidelity National Information Services Inc. (FIS) $63.15 -20.54%
Fortinet Inc. (FTNT) $45.62 -14.30%
CenturyLink Inc. (LUMN) $6.07 -13.83%
Cognizant Technology Solutions Corp. (CTSH) $51.97 -13.77%
Zoetis Inc (ZTS) $128.13 -13.05%
Global Payments Inc. (GPN) $98.81 -8.16%
QUALCOMM Inc. (QCOM) $103.69 -7.83%
MGM Resorts International (MGM) $32.55 -7.29%
Mosaic Company (MOS) $48.15 -7.21%
Nasdaq 100 - Risers
Mercadolibre Inc. (MELI) $890.72 4.63%
Booking Holdings Inc. (BKNG) $1,855.00 4.32%
eBay Inc. (EBAY) $39.15 2.86%
JD.com, Inc. (JD) $40.72 2.21%
Nvidia Corp. (NVDA) $135.05 2.16%
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $412.54 1.42%
Tesla Inc (TSLA) $217.86 1.34%
Baidu Inc. (BIDU) $79.12 1.27%
KLA-Tencor Corp. (KLAC) $315.98 1.14%
Biomarin Pharmaceutical Inc. (BMRN) $85.06 1.06%
Nasdaq 100 - Fallers
Cognizant Technology Solutions Corp. (CTSH) $51.97 -13.77%
QUALCOMM Inc. (QCOM) $103.69 -7.83%
Dish Network Corp. (DISH) $13.75 -5.50%
DENTSPLY Sirona Inc. (XRAY) $26.99 -4.22%
Hasbro Inc (HAS) $60.17 -3.93%
Apple Inc. (AAPL) $140.07 -3.42%
Fiserv Inc. (FISV) $97.18 -3.36%
NortonLifeLock Inc. (NLOK) $21.56 -3.14%
Marriott International - Class A (MAR) $148.21 -3.12%
Charter Communications Inc. (CHTR) $336.44 -3.11%