US close: Markets mixed as Fed stands pat on rates

US stocks finished in a mixed state on Wednesday, as the Federal Open Market Committee kept its interest rate targets steady after its first meeting of 2020.

The Dow Jones Industrial Average ended the session up 0.04% at 28,734.45 and the Nasdaq Composite was ahead 0.06% at 9,275.16, while the S&P 500 slipped 0.09% to 3,272.40.

At the open, the Dow was 90.35 points higher after closing in the green on Tuesday, when stocks attempted to undo some of the damage sustained during the previous session.

During the session, the Fed revealed that it was standing pat on its interest rate targets at between 1.5% and 1.75%, as expected, in a unanimous decision.

It did, however, adjust the language in its post-meeting statement to suggest the central bank was keener to push inflation higher.

The committee said it wanted to see “inflation returning to the committee’s symmetric two percent objective.”

That was different from the FOMC’s long-standing language that it was looking to move inflation “near” to that benchmark, which it believes is the right level for a growing economy.

“We wanted to underscore our commitment to 2% not being a ceiling, to inflation running symmetrically around 2% and we’re not satisfied with inflation running below 2%,” said Federal Reserve chairman Jerome Powell in his press conference after the meeting.

Meanwhile, officials from Beijing revealed that the death toll from the coronavirus outbreak had risen to 132, with total cases in China now standing at 5,974.

Chinese government economist Zhang Ming warned that the country's first-quarter growth could drop below 5% as the virus spreads across the country.

“The market rebound petered out on Wednesday afternoon, investors struggling to justify the gains in the face of the latest coronavirus news,” said SpreadEx's Connor Campbell.

“Given investors freaked out as China’s GDP dropped to 6.0%, a reading more than 1% under that is a potential nightmare.”

The White House also said it had told US airlines that it was considering a suspension of flights between China and the States, taking their lead from British Airways.

On the macro front, overall mortgage application volume jumped 7.2% last week, according to the Mortgage Bankers Association.

“Mortgage applications continued their strong start to the year, as borrowers acted on the drop in mortgage rates last week,” said MBA economist Joel Kan.

"Rates were driven lower by investors' increased concern about the economic impact from China’s coronavirus outbreak, in addition to existing concerns over trade and other geopolitical risks."

Elsewhere, America's shortfall in trade on goods with the rest of the world widened again at the tail-end of 2019, as import growth snapped back.

According to the US Department of Commerce, the so-called visible trade deficit increased by 8.5% versus November to reach $68.3bn, against consensus expectations for $64.5bn.

Purchases of goods from overseas rose by 2.3% month-on-month to $205.3bn, while exports were only 0.3% higher to $137.0bn.

In the same report, Commerce reported a 0.1% month-on-month dip in wholesale inventories to $675.6bn.

Lastly, the National Association of Realtors revealed that its pending home sales index plunged 4.9% to 103.2 in December.

However, lower mortgage rates meant that contract signings were up 4.6% year-on-year.

In corporate news, AT&T shares were down 3.97% after missing on revenues in its most recent trading quarter, while Mastercard managed gains of 0.02% despite topping profit estimates during a strong holiday season.

Boeing shares flew 1.71% higher despite posting its first annual loss in more than two decades, while General Electric shares shot up 10.32% after earnings topped expectations.

McDonald's was 1.92% firmer following a quarterly sales beat.

Dow Jones - Risers

Apple Inc. (AAPL) $324.34 2.09%
McDonald's Corp. (MCD) $214.44 1.92%
Boeing Co. (BA) $322.02 1.72%
Microsoft Corp. (MSFT) $168.04 1.56%
Merck & Co. Inc. (MRK) $87.24 1.15%
Visa Inc. (V) $204.86 0.99%
Johnson & Johnson (JNJ) $150.54 0.70%
Home Depot Inc. (HD) $234.02 0.07%
Coca-Cola Co. (KO) $57.01 0.00%
Dowdupont Inc. (DWDP) $30.52 0.00%