Here Are 3 Hot Things to Know About Stocks Right Now
- The S&P 500 finished at a record closing high Wednesday after the Federal Reserve voted to cut interest rates for the third time this year.
- Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report rose slightly after the semiconductor maker posted revenue that slightly missed estimates, in-line earnings and mixed guidance. AMD is Real Money's Stock of the Day.
- General Electric (GE) - Get General Electric Company Report climbed after beating analysts' third-quarter earnings forecasts.
Wall Street Overview
Stocks finished higher after the Federal Reserve voted Wednesday to cut interest rates for the third time this year.
The S&P 500 finished up 9 points, or 0.33% to a new record closing high of 3,046.77. It was the second record close for the index this week.
General Electric (GE) - Get General Electric Company Report lead the S&P's advance, climbing 11.5% to $10.11 after the industrial company posted third-quarter adjusted earnings that beat analysts' forecasts.
The Dow Jones Industrial Average finished up 115 points, or 0.43%, to 27,186, while the Nasdaq was up 0.33%.
Johnson & Johnson (JNJ) - Get Johnson & Johnson Report , McDonald's (MCD) - Get McDonald's Corporation Report , and United Technologies (UTX) - Get United Technologies Corporation Report were the Dow's biggest gainers.
On Tuesday, Johnson & Johnson released results of 15 new tests from the same bottle of Johnson's Baby Powder previously tested by the FDA that found no asbestos.
The Federal Open Market Committee voted to cut the federal-funds target rate by another 25 basis points to a range of between 1.5% and 1.75%.
"In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the Committee decided to lower the target range for the federal funds rate to 1-1/2 to 1-3/4 percent," the Federal Reserve said in a statement. "This action supports the Committee's view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2% objective are the most likely outcomes, but uncertainties about this outlook remain."
Federal Reserve Chairman Jerome Powell said after Wednesday's meeting that the Fed's current monetary policy stance is "likely to remain appropriate as long as incoming information about the state of the economy remains broadly consistent with our outlook."
Powell also said that he did not see a risk of inflation and that he was not thinking about raising rates right now.
Ian Shepherdson, chief economist with Pantheon Macroeconomics, noted that the Fed had dropped its previous pledge to "act as appropriate to sustain the expansion" and now says that the committee will "monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate".
"In other words, they think they have done enough for now and that further easings will be contingent on a material weakening in growth and/or inflation," Shepherdson said. "The description of the current state of growth and inflation is little changed from September, and the door remains open if growth tanks in Q4, which we think is an even-money bet. But a rate cut in response to Q4 weakness would come in January, not December; they are done for this year, barring some sort of shock."
Mike Loewengart, vice president of investment strategy with E*Trade, said that "this is the clearest signal we've gotten that the time for action is over for the Fed."
"After all, ADP and GDP did exhibit significant growth this month, albeit at a slowing pace," he said. "What's also interesting is the sheer alignment we saw from officials, and note that no one wanted a 50 basis point cut. While the S&P is down on the news, this is no doubt good news for banks, and we're seeing a bump in that sector today."
Investors widely expect policymakers on the committee to vote to cut interest rates as an ongoing global manufacturing downturn prompts other central banks -- most notably the European Central Bank and the Bank of Japan -- to keep their own rates low.
In economic news, private U.S. employers added 125,000 jobs during October, according to a report from payroll company Automatic Data Processing, matching economists' forecasts. The official U.S. jobs report for October will be released Friday.
U.S. gross domestic product grew at an annualized rate of 1.9% in the third quarter, the Commerce Department said, down slightly from 2% in the second quarter. Economists were expecting a rate of 1.6%.
"The first read of Q3 real GDP showed an economy growing at a modest pace, right in-line with expectations at an annual rate of 1.9% and only slightly below last month's 2.0%," said Michael Reynolds, investment strategy officer at Glenmede.
"Two percent growth is certainly nothing to get too excited about -- it constitutes further evidence that the U.S. economy is not entirely insulated from the global manufacturing slowdown, though it's not entirely exposed either. Overall, this quarter's results suggest that recession fears may have been overblown, and the U.S. economy is simply going through another growth scare, akin to late 2015, early 2016."
Chilean President Sebastian Pinera said the country won't host the Asia-Pacific Economic Cooperation summit scheduled for next month following a wave of protests and riots. Pinera also canceled the COP25 environmental conference set for December.
The U.S. and China were looking to sign "phase one" of the trade agreement between the world's largest economies at the summit, but Reuters reported Tuesday that the two sides might not reach an agreement by that time.
U.S. President Donald Trump's demand that Beijing commit to big purchases of American farm products has become a major sticking point in talks to end the ongoing trade war, Reuters reported, citing people briefed on the negotiations.
Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report rose slightly to $33.13 after the semiconductor maker posted revenue that slightly missed estimates, inline earnings and mixed guidance. Advanced Micro Devices is Real Money's Stock of the Day.
Fiat Chrysler (FCAU) - Get Stellantis N.V. Report rose 5.3% to $14.98 after a report that the Italian-U.S. automaker is in merger talks with French automaker PSA Group (PUGOY) , which owns Peugeot and Citroen.
U.S. oil prices were after
said domestic crude stocks fell far more than analysts' forecasts last week, suggesting weakening global demand from the world's biggest exporter.Apple and Facebook
are scheduled to report earnings after the closing bell Wednesday.
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