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Moderna, Qualcomm, Merck Active As Stocks Mixed In Fed Taper Wake: Jobless Claims Fall to 269,000

A 'dovish' Fed taper has stocks on the move Thursday, but gains remain cautious ahead of Friday's October non-farm payroll report.

U.S. equity futures traded higher Thursday, with tech stocks pushing deeper into record high territory, as global investors unpack a dovish Federal Reserve policy statement following its widely-signaled tapering decision.

Stocks were given a modest boost, as well, after policymakers at the Bank of England voted 7-2 in favor of keeping their benchmark interest rate unchanged at 0.1% amid speculation it would signal near-term hikes amid faster inflation in the European region's third-largest economy.

The cautious stance followed yesterday's Fed's tapering decision, which will trim $15 billion from its $120 billion in monthly bond purchases, and Chairman Jerome Powell's pledge to be "patient" on rate hikes while he repeated his view that 'transitory" inflation pressures will ease into next year.

The dovish assessment -- which came alongside record-high readings for services sector activity and the steepest gains in the 'prices paid' component of the ISM data since 2005 -- lifted Wall Street to a triple-set of record highs last night and looks to add at least some momentum heading into the trading day.

That said, Powell's message on rates is being challenged by interest rate traders and market participants who have remained skeptical of his insistence that inflation pressures -- which have taken benchmark readings to the highest levels in decades -- are the result of supply chain and energy market shocks linked to the global pandemic.

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"Ideally, we would see further development of the labor market in a context where there isn't another COVID spike," Powell told reporters yesterday in Washington. "We don't think it is time yet to raise interest rates.

However, at the the signaled pace of tapering, the Fed would exhaust it total pandemic purchase program by June of next year, with Fed Funds futures now pricing in a 90% chance of a rate hike by the following month.

The Dow Jones Industrial Average was marked 85 points lower in late-morning trading as bank stocks declined on the dovish Fed signaling. The S&P 500 jumped 13 points, however, while the tech-focused Nasdaq Composite gained 115 points from last night's record close as benchmark 10-year notes yields ease to 1.533%.

In terms of individual stocks, Qualcomm  (QCOM) - Get QUALCOMM Incorporated Report shares surged 13% after the chipmaker, and key Apple  (AAPL) - Get Apple Inc. (AAPL) Report supplier, blasted fourth quarter earnings estimates and issued a robust holiday-quarter forecast.

Moderna  (MRNA) - Get Moderna, Inc. Report, on the other side, tumbled 15.9% after posting weaker-than-expected third quarter earnings and cutting  its full-year forecast for COVID vaccine sales.

Merck & Co.  (MRK) - Get Merck & Co., Inc. (MRK) Report shares gained 1.1% after U.K. regulators granted approval for the U.S. drug giant’s experimental drug molnupiravir, marking the first authorization from a public health body for an oral antiviral treatment for COVID-19.

Roku  (ROKU) - Get Roku, Inc. Class A Report, meanwhile, slumped 5.1% after the streaming entertainment provider reported third-quarter earnings that beat forecasts but revenue that missed expectations as TV sales that incorporate its streaming service slowed due to supply chain issues.