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Stocks edged lower Wednesday as investors weighed the outcome of the Federal Open Market Committee’s latest meeting as well as a slew of earnings news from the major companies in the S&P 500.
The
slid 165 points, or 0.5%, while the
was down 0.1% after briefly notching and intraday high. The
rose 0.3%.
Energy stocks were big winners in Wednesday’s trading as oil prices were up by more than 1% on demand optimism.
(DVN) shares were up 8.5% while APA Corporation (APA) shares climbed 7.7%.
Asian stocks mostly gained across the board, though the
fell 1%, with
shares slumping 3.7%, after the South Korean memory-chip maker’s net profit missed consensus. The
was flat, despite a flood of earnings news, with shares of
soaring after the best quarter in years.
Late afternoon the Federal Open Market Committee wrapped up its two day meeting and said it plans to keep interest rates near zero and said it plans to continue to buying bonds to the tune of $120 billion a month. While monetary policy is expected to stay accommodative, the Fed acknowledged that the economy is improving.
“In line with expectations, the FOMC changed remarkably little in the statement and left the administered rates unchanged — consistent with the lack of urgency despite the massive amounts of cash currently in the front-end of the curve,” Ian Lyngen, managing director at BMO Capital Markets, wrote it a note. “The Committee did acknowledge the ‘progress on vaccinations’–a clear nod to the Fed’s prevailing logic that as goes the pandemic so goes the recovery.”
Yields were in the spotlight again as the yield on the10-year Treasury note slipped to 1.621%, down slightly from Tuesday, after the Fed’s statement was released. The yield on the 10-year had been as high as 1.641% Wednesday, following the biggest daily jump in four weeks on Tuesday.
As well, stocks have logged a strong April, with the S&P 500 up over 5% and the
up more than 6%.
“The fact that benchmarks are already trading close to record levels is weighing on market sentiment with investors needing further bullish catalysts to remove fears of a correction and drive prices further up,” said Pierre Veyret, technical analyst at ActivTrades, in a note to clients.
President
Joe Biden
‘s first major speech to Congress later on Wednesday may also attract attention.
“The core of that [speech] will be him laying out the specifics of the American Families Plan, his commitment to child care, to education,” White House press secretary
Jen Psaki
told reporters last week, “and ensuring that there’s an investment in economic security from the federal government.”
Investors are keeping a close eye on earnings, notably from the technology sector, with
(ticker: AAPL)
(FB) and
(PPYL) all reporting after the market close, along with chip and telecommunications equipment maker
(QCOM) and online auctioneer
(EBAY).
Shares of
(MSFT) dropped 2.8% as the technology giant’s better-than-expected results may have still disappointed some, given shares have climbed 11% in the past month.
(GOOGL) shares climbed 3%, after the parent of Google reported a profit that nearly doubled Wall Street expectations, while sales were also a solid beat. As well, the company said the board of directors authorized an additional $50 billion in buybacks of its Class C shares.
(BA) stock fell 2.9% after reporting a loss of $1.53 a share, larger than the $1.16 loss forecast by Wall Street, on sales of $15.22 billion, above expectations for $15 billion.
(PINS) was another company that fell short of a high investor bar. Despite beating earnings expectations in its first quarter, shares of the social-media group fell 14.6%. The stock has gained 290% in the past year.
In Europe,
reported higher-than-expected profit and revenue, helped by a strong performance by its investment bank. The German lender boosted its year-outlook for revenue, as well as for its investment-bank unit. Shares climbed 11.1%, with analysts at Citigroup noting it was the best quarter for Deutsche Bank in eight years.
shares also climbed in Europe, after becoming the latest advertising group to post forecast-beating results as the industry rebounds from the Covid-19 pandemic.
(VIAC) stock dropped 3.2% even after getting upgraded to Buy from Neutral at Citigroup.
(SAVE) stock dropped 5.4% after getting downgraded to In-line from Outperform at Evercore.
Write to Carleton English at carleton.english@dowjones.com and Jacob Sonenshine at jacob.sonenshine@barrons.com
