After The Close
The stock market got off a sluggish start this morning, but then proceeded to advance at a strong pace for much of the day. Of note, traders were feeling more optimistic about the technology sector, in particular, and that helped push the broad market higher. At the end of the session, the Dow Jones Industrial Average was ahead 217 points; the S&P 500 Index was up 31 points; and the NASDAQ, which displayed leadership, was higher by 110 points. Market breadth was quite positive, with winners easily ahead of losers on the NYSE. From a sector perspective, the technology and consumer names forged ahead, while the financials failed to keep pace with the pack.
The economic news was supportive today. The employment situation seems to be in good shape. Specifically, initial jobless claims retreated to 221,000 for the latest reported week. Meanwhile, the Conference Board’s Index of Leading Indicators increased 0.2% in February, which was in line with analyst expectations.
In the corporate sector, a favorable report from Micron (MU) helped drive that stock higher. Based on Micron’s encouraging outlook, investors seemed to be feeling better about the entire technology space, and started deploying capital into many leading names. In contrast, things did not go well for Biogen, Inc.(BIIB). Shares of the biotechnology company tumbled on disappointing drug-related news.
Technically, equities continue to press ahead, adding to the already sizable gains achieved so far this year. Looking ahead, the first-quarter of 2019 will soon draw to a close. Many on Wall Street will be paying close attention to the results that follow, looking for signs that the remainder of the year will be productive. Elsewhere, trade negotiations with China will also play a key role for Wall Street.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Before The Bell
This early setback, which was continuing as the first hour of trading ended, came as the Federal Reserve was putting the finishing touches on the latest Federal Reserve Open Market Committee meeting. Expectations were virtually unanimous that the central bank would leave interest rates unchanged when it concluded the meeting at 2:00 PM (EDT) yesterday afternoon. And it would do just that. Investors also were on edge to see just what the Fed would say in its accompanying monetary statement. This profit taking followed one of the most bullish early year runs in many years.
Meanwhile, after this initial first-hour dip, which also was occasioned by new concerns about the fate of ongoing trade negotiations with China, the market attempted to draw a line in the sand in hopes of staging a late-morning comeback. Indeed, with the Fed decision and accompanying statement awaiting investors, there was a chance the market would turn around ahead of the meeting's end. Even so, some pundits were speculating that there was little that the Fed could do or say that would unleash the buyers, as a good outcome of the gathering was already largely baked into the price of equities.
True, there would be some success in paring the deficits as we headed toward the conclusion of the morning's trading, although the key indexes all remained below breakeven. Indeed, as we hit the noon hour in New York, the indexes had again fallen back and were near session lows to that point on some Fed fears. In all, the Dow, which fell by about 180 points at the morning's nadir, was still down by 150 points as the afternoon began. The deficit would build to more than 215 points in the early afternoon as investors awaited the Fed decision and rate statement.
As 2:00 (EDT) arrived and the central bank intoned that it was keeping interest rates unchanged and would likely not raise them at all in 2019 due to the slower pace in economic growth now in place, the markets did rally; albeit there was no major upturn being put in place. Still, the Dow erased its midday losses in line with the other averages. However, a big rally would not ensue and as we entered the final hour of trading, the indexes went in and out of the plus column. But that indecision would not last all that long, especially on the Dow, which fell into the close.
When all was said and done, the 30-stock blue-chip composite fell 142 points on concerns about the shift in the Fed and worries about an economy that may be slowing too much. The S&P 500 Index, meanwhile, was off modestly, while the NASDAQ retained a slight gain. Rather sizable deficits were inked by the S&P Mid-Cap 400 and the Russell 2000. Looking ahead to a new day now and following yesterday's underwhelming close, the markets were higher in Asia overnight, while in Europe the bourses are now little changed. Also, U.S. equities are showing early losses, while Treasury yields, off sharply after the Fed meeting ended, are now losing additional ground.
