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U.S. stock markets closed sharply higher on Thursday for three successive days. Market participants assessed the Fed’s decision to hike interest rate and the guidance of its future course of action. On Mar 16, the central bank raised interest rate in expected line. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 1.2% or 417.66 points to close at 34,480.76. Notably, 24 component of the 30-stock index ended in green while 6 finished in negative zone. The major gainer of the blue-chip index was The Dow Inc. (DOW - Free Report) , which gained 5.4%. Dow carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The tech-heavy Nasdaq Composite finished at 13,614.78, advancing 1.3% or 178.23 points due to the strong performance of large-cap technology stocks. This marked the best three-day performance in a row by the tech-laden index since Nov 5, 2020.
Meanwhile, the S&P 500 rose 1.2% to end at 4,411.67. All 11 broad sectors of the benchmark index closed in positive zone. The Energy Select Sector SPDR (XLE) rallied 3.4%.
The fear-gauge CBOE Volatility Index (VIX) was down 3.8% to 25.67. A total of 12.88 billion shares were traded Thursday, lower than the last 20-session average of 14.18 billion. Advancers outnumbered decliners on the NYSE by a 4.10-to-1 ratio. On Nasdaq, a 2.93-to-1 ratio favored advancing issues.
Fed Raises Interest Rate
On Mar 16, the Fed announced after the completion of its 2-day FOMC meeting that it would raise the benchmark interest rate by 25 basis points effective immediately. The Fed funds flow rate will now be hiked to the range of 0.25-0.50% from 0-0.25% set by the central bank on March 2022 to combat the pandemic.
Fed’s dot-plot, a graphic representation of the views of Fed officials, indicated that six more rate hike of the same magnitude would come this year, followed by another three in next year. The Fed projected that the benchmark interest rate would be around 1.9% by this year-end.
Moreover, the quantitative easing program of buying $120 billion of bonds per month will terminate this month. Additionally, Fed Chairman Jerome Powell indicated that the central bank would start shrinking its $9 trillion balance sheet, mostly consisting of U.S. Treasury Notes and mortgage-backed securities from May 2022. This will result in another form of rate hike.
Economic Data
The Department of Labor reported that the weekly jobless claims decreased 15,000 to 214,000 for the week ended Mar 12. The consensus estimate was 219,000. Previous week’s data was revised upward from 227,000 reported earlier to 229,000. The initial claims data is currently hovering around the pre-pandemic level came in below 250,000 for seven weeks in a row. The latest data was the lowest of 2022 so far.
Continuing claims (for those who have already received government benefits and reported with one week lag) fell by 71,000 to 1.42 million, the lowest level since Feb 21, 1970. The four-week moving average data, which smoothed out weekly fluctuations, dropped 8,750 to 223,000.
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported that housing start in February came in at a seasonally adjusted rate of 1.769 million units, surpassing the consensus estimate of 1.698 million units. January’s data was revised upward to 1.657 million units from 1.638 million units reported earlier. Month over month, housing starts climbed 6.8% and year over year, the metric jumped 22.3%.
Building permits in February came in at a seasonally adjusted rate of 1.859 million units, outpacing the consensus estimate of 1.85 million units. January’s data was revised downward to 1.895 million units from 1.899 million units reported earlier. Month over month, building permits fell 1.9% while year over year, the metric advanced 7.7%.
The federal Reserve reported that industrial production increased 0.5% in February, lagging the consensus estimate of 0.6%. In January, the metric increased by 1.4%.
The manufacturing output, which accounts for nearly 12% of the U.S. GDP, rose 1.2% in February and 7.4% year over year. The mining activities were up 0.1% in February and 17.3% year over year. Utilities were down 2.7% in February and 1.2% year over year.
For the industrial sector as a whole, capacity utilization came in at 77.6% in February compared with the consensus estimate of 77.9%. January’s data was revised downward from 77.6% reported earlier to 77.3%.
FedEx Corp.’s (FDX - Free Report) third-quarter fiscal 2022 (ended Feb 28, 2022) earnings (excluding $0.39 from non-recurring items) of $4.59 per share fell short of the Zacks Consensus Estimate of $4.69. (Read More).
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Stock Market News for Mar 18, 2022
U.S. stock markets closed sharply higher on Thursday for three successive days. Market participants assessed the Fed’s decision to hike interest rate and the guidance of its future course of action. On Mar 16, the central bank raised interest rate in expected line. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 1.2% or 417.66 points to close at 34,480.76. Notably, 24 component of the 30-stock index ended in green while 6 finished in negative zone. The major gainer of the blue-chip index was The Dow Inc. (DOW - Free Report) , which gained 5.4%. Dow carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The tech-heavy Nasdaq Composite finished at 13,614.78, advancing 1.3% or 178.23 points due to the strong performance of large-cap technology stocks. This marked the best three-day performance in a row by the tech-laden index since Nov 5, 2020.
Meanwhile, the S&P 500 rose 1.2% to end at 4,411.67. All 11 broad sectors of the benchmark index closed in positive zone. The Energy Select Sector SPDR (XLE) rallied 3.4%.
The fear-gauge CBOE Volatility Index (VIX) was down 3.8% to 25.67. A total of 12.88 billion shares were traded Thursday, lower than the last 20-session average of 14.18 billion. Advancers outnumbered decliners on the NYSE by a 4.10-to-1 ratio. On Nasdaq, a 2.93-to-1 ratio favored advancing issues.
Fed Raises Interest Rate
On Mar 16, the Fed announced after the completion of its 2-day FOMC meeting that it would raise the benchmark interest rate by 25 basis points effective immediately. The Fed funds flow rate will now be hiked to the range of 0.25-0.50% from 0-0.25% set by the central bank on March 2022 to combat the pandemic.
Fed’s dot-plot, a graphic representation of the views of Fed officials, indicated that six more rate hike of the same magnitude would come this year, followed by another three in next year. The Fed projected that the benchmark interest rate would be around 1.9% by this year-end.
Moreover, the quantitative easing program of buying $120 billion of bonds per month will terminate this month. Additionally, Fed Chairman Jerome Powell indicated that the central bank would start shrinking its $9 trillion balance sheet, mostly consisting of U.S. Treasury Notes and mortgage-backed securities from May 2022. This will result in another form of rate hike.
Economic Data
The Department of Labor reported that the weekly jobless claims decreased 15,000 to 214,000 for the week ended Mar 12. The consensus estimate was 219,000. Previous week’s data was revised upward from 227,000 reported earlier to 229,000. The initial claims data is currently hovering around the pre-pandemic level came in below 250,000 for seven weeks in a row. The latest data was the lowest of 2022 so far.
Continuing claims (for those who have already received government benefits and reported with one week lag) fell by 71,000 to 1.42 million, the lowest level since Feb 21, 1970. The four-week moving average data, which smoothed out weekly fluctuations, dropped 8,750 to 223,000.
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported that housing start in February came in at a seasonally adjusted rate of 1.769 million units, surpassing the consensus estimate of 1.698 million units. January’s data was revised upward to 1.657 million units from 1.638 million units reported earlier. Month over month, housing starts climbed 6.8% and year over year, the metric jumped 22.3%.
Building permits in February came in at a seasonally adjusted rate of 1.859 million units, outpacing the consensus estimate of 1.85 million units. January’s data was revised downward to 1.895 million units from 1.899 million units reported earlier. Month over month, building permits fell 1.9% while year over year, the metric advanced 7.7%.
The federal Reserve reported that industrial production increased 0.5% in February, lagging the consensus estimate of 0.6%. In January, the metric increased by 1.4%.
The manufacturing output, which accounts for nearly 12% of the U.S. GDP, rose 1.2% in February and 7.4% year over year. The mining activities were up 0.1% in February and 17.3% year over year. Utilities were down 2.7% in February and 1.2% year over year.
For the industrial sector as a whole, capacity utilization came in at 77.6% in February compared with the consensus estimate of 77.9%. January’s data was revised downward from 77.6% reported earlier to 77.3%.
Stocks That Have Made Headline
FedEx Stock Declines as High Costs Hurt Q3 Earnings
FedEx Corp.’s (FDX - Free Report) third-quarter fiscal 2022 (ended Feb 28, 2022) earnings (excluding $0.39 from non-recurring items) of $4.59 per share fell short of the Zacks Consensus Estimate of $4.69. (Read More).