US close: Stocks mixed as Fed cuts interest rates by 25 basis points
By Josh White
Date: Thursday 19 Sep 2019
(Sharecast News) - US stocks finished in a mixed state on Wednesday, as investors reacted to a rate cut decision from the US Federal Reserve late in the session.
The Dow Jones Industrial Average ended the day up 0.13% at 27,147.08 and the S&P 500 added 0.03% to 3,006.73, while the Nasdaq Composite shed 0.11% to settle at 8,177.39.
On Tuesday, the Dow had closed higher as crude oil futures skidded on news that Saudi oil output could be fully restored quicker than had originally been anticipated.
Focus for the entirety of the session was well and truly locked on the Federal Reserve, with recent comments from US president Donald Trump branding Fed policymakers "boneheads" when he demanded the bank set zero or negative rates.
The US central bank cut its main policy rate further in the end, with several of its top officials believing that it would need to be lowered again before the year was out.
According to the so-called 'dot-plot' graphs provided alongside its policy statement, seven of the Fed's 17 board members and regional Federal Reserve bank presidents now believed that the most appropriate course of action would be another 25 point cut before the end of 2019.
That was roughly in line with what Fed funds futures were pricing in at the time, according to the CME's FedWatch tool.
Fed funds futures were pricing in odds of around 66% for a cut to 1.50%-1.75% by April 2020 - a lower probability than was typically seen before a cut in rates.
Five policymakers thought the target range should be at 2.0%-2.25% at the end of the year, while two of them - Esther George and Eric Rosengren - voting against Wednesday's rate cut.
In his post-meeting press conference, Fed chairman Jerome Powell said that the central bank was prepared to move "forcefully" if necessary.
James Bullard - the head of the Atlanta Fed - voted for a 50 basis point reduction.
"We are baffled by the lack of change in the economic forecasts for 2020," said Ian Shepherdson of Pantheon Macroeconomics.
"The overriding message here, then, is uncertainty, which has generated forecasts showing that not much will change in either the economy or policy.
"Probably, this will turn out to be wrong, but it's just not possible to say with any confidence in which direction, or when."
Also weighing on sentiment during the session was news that Donald Trump had asked the US Secretary to the Treasury to increase sanctions against Iran, in the latest escalation of tensions between the two countries.
The US president accused Iran of being behind the two drone attacks on a Saudi Arabian oilfield and the country's key processing facility over the weekend, which sparked fears that a surge in crude prices could add to the slowdown in the global economy.
On the data front, US housing starts hit a 12-year in August, according to figures released by the Commerce Department.
Housing starts jumped 12.3% to a seasonally-adjusted rate of 1.364 million from July's revised rate of 1.215m, coming in well above expectations of 1.250m.
On the year, housing starts were 6.6% higher.
Elsewhere, mortgage applications were mostly unchanged on the week ended 13 September, even as home borrowing costs shot up alongside bond yields, according to the Mortgage Bankers Association.
The MBA's seasonally-adjusted mortgage activity index dipped 0.1% to 569.5, while loan requests for home purchases rose for a third straight week.
In corporate news, shares in General Mills slipped 0.91% after the US food giant missed first-quarter sales estimates.
FedEx shares slumped 12.92% after the shipping company posted a drop in first-quarter earnings and downgraded its guidance for the year.
Dow Jones - Risers
JP Morgan Chase & Co. (JPM) $119.79 1.00%
Apple Inc. (AAPL) $222.77 0.94%
Microsoft Corp. (MSFT) $138.52 0.82%
Merck & Co. Inc. (MRK) $83.02 0.62%
Boeing Co. (BA) $386.28 0.58%
Johnson & Johnson (JNJ) $130.40 0.57%
Nike Inc. (NKE) $88.08 0.56%
Walmart Inc. (WMT) $117.16 0.56%
Goldman Sachs Group Inc. (GS) $217.08 0.54%
Walt Disney Co. (DIS) $136.80 0.36%
Dow Jones - Fallers
Caterpillar Inc. (CAT) $131.05 -0.83%
Unitedhealth Group Inc. (UNH) $230.61 -0.82%
Walgreens Boots Alliance, Inc. (WBA) $54.41 -0.78%
Visa Inc. (V) $175.29 -0.66%
Travelers Company Inc. (TRV) $146.47 -0.53%
Exxon Mobil Corp. (XOM) $72.82 -0.48%
Intel Corp. (INTC) $51.74 -0.40%
3M Co. (MMM) $167.44 -0.37%
Pfizer Inc. (PFE) $36.38 -0.33%
American Express Co. (AXP) $118.74 -0.26%
S&P 500 - Risers
KLA-Tencor Corp. (KLAC) $157.98 3.53%
Comerica Inc. (CMA) $66.91 2.20%
Svb Financial Group (SIVB) $217.85 2.07%
Lennar Corp. Class A (LEN) $54.15 1.98%
PPG Industries Inc. (PPG) $119.43 1.89%
Applied Materials Inc. (AMAT) $52.09 1.74%
Pinnacle West Capital Corp. (PNW) $95.88 1.61%
Illumina Inc. (ILMN) $303.01 1.59%
Yum! Brands Inc. (YUM) $114.58 1.58%
Progressive Corp. (PGR) $75.17 1.57%
S&P 500 - Fallers
FedEx Corp. (FDX) $150.91 -12.92%
Alexion Pharmaceuticals Inc. (ALXN) $102.98 -4.50%
Noble Energy Inc. (NBL) $24.24 -3.39%
Fluor Corp. (FLR) $20.83 -3.25%
DENTSPLY Sirona Inc. (XRAY) $49.86 -2.98%
Nektar Therapeutics (NKTR) $20.10 -2.90%
NetApp Inc. (NTAP) $54.93 -2.85%
Tractor Supply Company (TSCO) $93.55 -2.73%
Msci Inc. (MSCI) $233.75 -2.66%
Borg Warner Inc. (BWA) $37.56 -2.52%
Nasdaq 100 - Risers
KLA-Tencor Corp. (KLAC) $157.98 3.53%
Applied Materials Inc. (AMAT) $52.09 1.74%
Illumina Inc. (ILMN) $303.01 1.59%
Seagate Technology Plc (STX) $56.75 1.25%
Analog Devices Inc. (ADI) $116.56 1.11%
Dollar Tree Inc (DLTR) $112.26 1.10%
Citrix Systems Inc. (CTXS) $96.72 1.04%
Apple Inc. (AAPL) $222.77 0.94%
Expedia Group Inc. (EXPE) $133.81 0.84%
Microsoft Corp. (MSFT) $138.52 0.82%
Nasdaq 100 - Fallers
Alexion Pharmaceuticals Inc. (ALXN) $102.98 -4.50%
Ctrip.Com International Ltd. Ads (CTRP) $34.03 -3.43%
DENTSPLY Sirona Inc. (XRAY) $49.86 -2.98%
Netflix Inc. (NFLX) $291.56 -2.36%
Fastenal Co. (FAST) $32.87 -2.09%
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $229.34 -1.93%
Paypal Holdings Inc (PYPL) $105.60 -1.77%
Adobe Systems Inc. (ADBE) $279.72 -1.75%
Symantec Corp. (SYMC) $24.02 -1.68%
Autodesk Inc. (ADSK) $151.11 -1.67%
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN