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Wall Street closed higher on Wednesday after the Federal Reserve kept its interest rates unchanged. However, the Fed is in a dilemma as to whether the current financial situation is sufficiently restrictive to tackle inflation or if the robust economy needs further measures to combat inflation. Investors continue to closely monitor third-quarter earnings. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.7% or 221.71 points to close at 33,274.58. Notably, 21 components of the 30-stock index ended in positive territory, while 11 finished in negative zone.
The tech-heavy Nasdaq added 210.23 points or 1.6% to close at 13,061.47.
The S&P 500 gained 1.1% or 44.06 points to end at 4,237.86. Nine out of the 11 broad sectors of the benchmark ended in positive territory. The Technology Select Sector SPDR (XLK), the Communication Services Select Sector SPDR (XLC), the Consumer Discretionary Select Sector SPDR (XLY), the Utilities Select Sector SPDR (XLU) and the Financials Select Sector SPDR (XLF) rose 1.9%, 1.5%, 1.2%, 1.1%, and 0.7%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 7% to 16.87. A total of 11.20 billion shares were traded on Wednesday, higher than the last 20-session average of 10.67 billion. Advancing issues outnumbered the declining ones on the NYSE by a 2.36-to-1 ratio. On the Nasdaq, a 1.20-to-1 ratio favored advancers. The S&P 500 posted seven new 52-week highs and 30 new 52-week lows. The Nasdaq Composite registered 24 new 52-week highs and 297 new 52-week lows.
On Wednesday, the Federal Reserve kept its benchmark policy rate unchanged in the range of 5.25-5.5% for the second time in a row. They're not sure if the current financial situation is tight enough to control inflation, or if the economy needs more restraints.
Fed Chair, Jerome Powell, described the present scenario as a bit of a puzzle. They're open to raising rates if inflation rises, but they're also worried that higher market-based interest rates could impact the economy. So, for now, they have decided to keep the interest rates unchanged and watch jobs data until their next meeting in December.
Despite hiking interest rates for almost two years, the Fed is not sure if the financial conditions are enough to bring inflation down to their desired 2%. Powell thinks it's a bit early to tell and said, "A few good months of data aren't enough to be confident."
Inflation is still above their 2% target, even though it has come down a bit. The Fed isn't certain if they need to raise rates further.
The Fed is also keeping an eye on rising Treasury bond yields and mortgage rates because these can slow down the economy. The Fed's statement acknowledged that the economy grew quite fast in the third quarter, due to consumer spending. But they are still not entirely sure how strong the economy is and if it's causing inflation to stall.
United Therapeutics Corporation (UTHR - Free Report) reported quarterly earnings of $5.38 per share, beating the Zacks Consensus Estimate of $4.89 per share. The company posted revenues of $609.4 million, surpassing the Zacks Consensus Estimate of $576.5 million. Consequently, shares of United Therapeutics rose 0.6%.
MasTec, Inc. (MTZ - Free Report) came up with earnings of $0.95 per share for third-quarter 2023, missing the Zacks Consensus Estimate of $1.92 per share. The company posted revenues of $3.26 billion, lagging the Zacks Consensus Estimate by $3.83 billion. As a result, shares of MTZ declined 17.6%.
Economic Data
The U.S. Census Bureau reported that construction spending for September increased 0.4%, in line with the consensus. The August number was revised up to an increase of 1% from the previously reported 0.5%.
Per the Institute for Supply Management, the ISM Manufacturing Index for October came in at 46.7, against the consensus of 49.3 for the period. In September, the reported number was 49.
Per a government report, for the week ended Oct 27, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.8 million barrels from the previous week.
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Stock Market News for Nov 02, 2023
Market News
Wall Street closed higher on Wednesday after the Federal Reserve kept its interest rates unchanged. However, the Fed is in a dilemma as to whether the current financial situation is sufficiently restrictive to tackle inflation or if the robust economy needs further measures to combat inflation. Investors continue to closely monitor third-quarter earnings. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.7% or 221.71 points to close at 33,274.58. Notably, 21 components of the 30-stock index ended in positive territory, while 11 finished in negative zone.
The tech-heavy Nasdaq added 210.23 points or 1.6% to close at 13,061.47.
The S&P 500 gained 1.1% or 44.06 points to end at 4,237.86. Nine out of the 11 broad sectors of the benchmark ended in positive territory. The Technology Select Sector SPDR (XLK), the Communication Services Select Sector SPDR (XLC), the Consumer Discretionary Select Sector SPDR (XLY), the Utilities Select Sector SPDR (XLU) and the Financials Select Sector SPDR (XLF) rose 1.9%, 1.5%, 1.2%, 1.1%, and 0.7%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 7% to 16.87. A total of 11.20 billion shares were traded on Wednesday, higher than the last 20-session average of 10.67 billion. Advancing issues outnumbered the declining ones on the NYSE by a 2.36-to-1 ratio. On the Nasdaq, a 1.20-to-1 ratio favored advancers. The S&P 500 posted seven new 52-week highs and 30 new 52-week lows. The Nasdaq Composite registered 24 new 52-week highs and 297 new 52-week lows.
Fed Retains Interest Rates Amid Economic Uncertainty
On Wednesday, the Federal Reserve kept its benchmark policy rate unchanged in the range of 5.25-5.5% for the second time in a row. They're not sure if the current financial situation is tight enough to control inflation, or if the economy needs more restraints.
Fed Chair, Jerome Powell, described the present scenario as a bit of a puzzle. They're open to raising rates if inflation rises, but they're also worried that higher market-based interest rates could impact the economy. So, for now, they have decided to keep the interest rates unchanged and watch jobs data until their next meeting in December.
Despite hiking interest rates for almost two years, the Fed is not sure if the financial conditions are enough to bring inflation down to their desired 2%. Powell thinks it's a bit early to tell and said, "A few good months of data aren't enough to be confident."
Inflation is still above their 2% target, even though it has come down a bit. The Fed isn't certain if they need to raise rates further.
The Fed is also keeping an eye on rising Treasury bond yields and mortgage rates because these can slow down the economy. The Fed's statement acknowledged that the economy grew quite fast in the third quarter, due to consumer spending. But they are still not entirely sure how strong the economy is and if it's causing inflation to stall.
Tech stocks went on a rally following the meeting. Shares of Apple Inc. (AAPL - Free Report) rose 1.9%, while Microsoft Corporation (MSFT - Free Report) jumped 2.4%. Shares of Meta Platforms, Inc. (META - Free Report) gained 3.5%. META carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Mixed Q3 Earnings Results
United Therapeutics Corporation (UTHR - Free Report) reported quarterly earnings of $5.38 per share, beating the Zacks Consensus Estimate of $4.89 per share. The company posted revenues of $609.4 million, surpassing the Zacks Consensus Estimate of $576.5 million. Consequently, shares of United Therapeutics rose 0.6%.
MasTec, Inc. (MTZ - Free Report) came up with earnings of $0.95 per share for third-quarter 2023, missing the Zacks Consensus Estimate of $1.92 per share. The company posted revenues of $3.26 billion, lagging the Zacks Consensus Estimate by $3.83 billion. As a result, shares of MTZ declined 17.6%.
Economic Data
The U.S. Census Bureau reported that construction spending for September increased 0.4%, in line with the consensus. The August number was revised up to an increase of 1% from the previously reported 0.5%.
Per the Institute for Supply Management, the ISM Manufacturing Index for October came in at 46.7, against the consensus of 49.3 for the period. In September, the reported number was 49.
Per a government report, for the week ended Oct 27, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.8 million barrels from the previous week.