Fed’s decision to keep interest rates unchanged continued to lead the benchmarks higher on Thursday. Although Fed Chairwoman Janet Yellen hinted at a rate hike by the end of this year, the lack of an immediate rate-hike decision continued to boost investor sentiment. All the three key U.S. indexes registered gains for the third straight session, with the Nasdaq touching a record high for the second consecutive trading day.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (DJI) increased 0.5%, to close at 18,392.46. The S&P 500 rose 0.7% to close at 2,177.18. The tech-laden Nasdaq Composite Index closed at 5,339.52 gaining 0.8%. The fear-gauge CBOE Volatility Index (VIX) decreased 11.3% to settle near at 11.8. A total of around 6.8 billion shares were traded on Thursday, in line with the last 20-session average. Advancers outpaced declining stocks on the NYSE. For 80% stocks that advanced, 17% declined.
Fed Led Bull Run Continues
At the end of its two-day policy meeting on Wednesday, the Fed had decided to keep key interest rates unchanged. The FOMC in its policy statements said that the argument for a rate hike “has strengthened,” but the central bank awaited “further evidence of continued progress” before raising rates.
However, Fed Chairwoman Janet Yellen’s comments fueled December rate hike chances even further. Yellen said that she expects a rate hike in 2016 if the labor market continues to progress and “there are no major risks that develop.”
Despite Yellen’s comments, Fed’s decision to keep rates unchanged in September had a positive impact on the broader market. The Real Estate Select Sector SPDR (XLRE), which gained 2%, was the best gainer among the S&P 500 sectors. Key stocks from the retail sector including Weyerhaeuser Co. ( (WY - Analyst Report) , Digital Realty Trust Inc. (DLR - Snapshot Report) and Welltower Inc. (HCN - Analyst Report) gained 5.7%, 2.7% and 2.4%, respectively. All the three companies possess a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
Economic Data to Look at
In economic news, initial claims fell last week by 8,000 to 252,000, settling at its lowest level in last two months. This was lower than the consensus estimate of 261,000.
Meanwhile, sales of existing homes fell 0.9% in August from July to a seasonally adjusted rate of 5.33 million, according to the National Association of Realtors. Such sales of previously owned homes came lower than the consensus estimate of 5.45 million.
Also, the Leading Indicators Index decreased 0.2% in September, in contrast to July’s increase of 0.5%. Declines in the manufacturing sector weighed on the index.
Stocks That Made Headlines Today
Rite Aid's Q2 Earnings in Line, Sales Miss Estimates
Rite Aid Corporation (RAD - Analyst Report) reported in line earnings in the second quarter of fiscal 2017, but sales missed our estimates. ( Read More)
Sanderson Farms to Pay Special Dividend, Ups Regular Rate
Sanderson Farms, Inc. (SAFM - Snapshot Report) recently announced that its board of directors has approved an increase of 2 cents per share in its quarterly dividend rate. ( Read More)
Lennar to Expand in Florida with WCI Communities Buyout
Lennar Corporation (LEN - Analyst Report) has reached a definitive agreement to buy WCI Communities Inc. (WCIC - Snapshot Report) for $643 million. ( Read More)
Virgin America Stock Declines as Merger Concerns Surface
Virgin America Inc’s (VA - Snapshot Report) stock tanked, as new concerns have cropped up regarding its proposed acquisition by Alaska Air Group, Inc. (ALK - Analyst Report) . ( Read More)
Tesla Sues Michigan State Officials on Dealer Sales Law
Tesla Motors, Inc. (TSLA - Analyst Report) has sued a number of Michigan State Officials in federal court, challenging the state’s law that prevents car manufacturers from selling directly to customers. ( Read More)
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