U.S. stocks ended mostly higher on Wednesday as investors’ confidence got a boost from upbeat earnings reports by a slew of big names. Also, investors got an idea into when the Fed might start rolling back its easy monetary policy. The S&P 500 and Nasdaq ended in positive territory, while the Dow ended almost flat.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) ended flat, slipping less than 0.1% or 0.53 points to close at 34,377.81 points. The blue-chip index bounced back from its intraday lows wherein it had at one point lost more than 260 points
The S&P 500 gained 0.3% or 13.15 points to finish at 4,363.80 points, after trading between gains and losses throughout the session. Utility and materials were the biggest winners.
The Utilities Select Sector SPDR (XLU) added 1.2%, while the Materials Select Sector SPDR (XLB) added 0.8%. Nine of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq rose 0.7% or 105.72 points to close at 14,571.64 points, ending its losing streak. Shares of NVIDIA Corporation NVDA gained 1.3%, while Alphabet, Inc. GOOGL added 0.8%. NVIDIA carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The fear-gauge CBOE Volatility Index (VIX) was down 6.10% to 18.64. A total of 9.31 billion shares were traded on Wednesday, lower than the last 20-session average of 10.8 billion. Advancers outnumbered decliners on the NYSE by a 1.73-to-1 ratio. On Nasdaq, a 1.39-to-1 ratio favored advancing issues.
Investors Digest FOMC Minutes of Meeting
On Wednesday, the minutes of Federal Open Market Committee’s September meeting were released that showed the central bank could start tapering its asset-purchase program as soon as mid-November and is likely to end the process by July next year.
This is almost in line with the market’s expectations. The Fed is expected to cut down on bond buying by around $15 billion every month from the existing $120 billion a month. However, the Fed remained divided on how much threat the inflation could pose and how soon they may need to increase interest rates.
The S&P 500 added to the gains for a brief period following the release of the minutes of the meeting. Economically sensitive stocks took a hit.
Moreover, the consumer price index released on Wednesday came in higher than expected, which added to the case for the central bank to raise interest rates. This weighed heavy on the Dow, leading to stocks taking a hit.
Big Names Report Q3 Earnings
The third-quarter earnings season also kicked off on Wednesday, with a few big names reporting upbeat results. The big banks have started reporting their quarterly results. Solid third-quarter earnings from the likes of JPMorgan Chase & Co. JPM and others somewhat gave investors’ confidence a boost.
Investors are awaiting results from other big banks and financial institutions like Bank of America Corporation BAC and Citigroup, Inc. C this week.
The Labor Department said on Wednesday that the consumer price index (CPI) for September rose 0.4% month over month and 5.4% year over year. This is higher than the economists’ expectations of a month-over-month increase of 0.3% and an annualized rate of 5.3%.
Excluding energy and food, the core CPI increased 0.2% on a month-over-month basis and 4% year over year.
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