Stocks rose to new intraday records on Wednesday as Donald Trump again made vague references to a forthcoming tax reform plan.
The S&P 500 rose 0.15%, the Dow Jones Industrial Average gained 0.33%, and the Nasdaq increased 0.2%. The three index set new intraday record highs.
The president on Wednesday said that a "massive tax plan" would be made public in the "not-too-distant future." Trump made the remarks at a meeting with retail executives, which included the heads of Target (TGT - Get Report) and Best Buy (BBY - Get Report) . Stocks hit records last week after Trump alluded to plans for tax reform, though has not yet revealed any substantive detail.
It's day two of Federal Reserve Chair Janet Yellen's testimony to Congress. Yellen addressed the House of Representatives on Wednesday, a day after delivering her semi-annual monetary policy testimony before the Senate Banking Committee. In a question-and-answer session, Yellen listed a number of improving metrics including job growth since the financial crisis and rising wages in the past year.
Yellen also said there was no evidence that the Volcker Rule had negatively impacted bond market liquidity. The question, posed by House Financial Services Commitee Chairman Jeb Hensarling, parallels with President Donald Trump's push to dismantle Dodd-Frank reforms that require financial institutions to pass stringent regulations.
Yellen played the part of both dove and hawk in her remarks on Capitol Hill Tuesday, reiterating that rate hikes would be gradual but pointing out that it would be "unwise" to wait too long to hike again.
Market expectations for a rate hike at next month's meeting remain slim, but the outlook for the rest of the year is murkier. The Fed has expressed a more hawkish lean in recent months as inflation trends toward the central bank's 2% target and the U.S. economy nears full employment.
"Regarding the outlook for monetary policy, we view her remarks as indicating a low probability of a rate hike in March," Barclays analysts wrote in a note. "We see it as consistent with 'a few' rate increases this year that the chair referenced in her January speech and the committee projected in December."
Futures indicate markets expect a 43% chance of at least three hikes this year, according to CME Group. The chances of at least three moves in 2017 sat at 33% on Monday.
Crude oil prices slipped on Wednesday after domestic inventories rose at a steeper pace than anticipated in the past week. The Energy Information Administration reported an increase of 9.5 million barrels to U.S. stockpiles in the past week, adding to growth of 13.8 million barrels the week earlier. Analysts anticipated stockpiles to increase by 3.51 million barrels.
West Texas Intermediate crude was down 0.1% to $53.16 a barrel.
Retail sales in the U.S. increased by 0.4% in January, slowing from a revised 1% increase a month earlier. Analysts estimated sales to increase by 0.1%. Excluding autos and gas, sales rose 0.7%, smashing consensus of 0.3% growth.
Consumer prices rose in January, another sign inflation is heating up. The consumer price index climbed by 0.6% in January, double estimates, and increased by 2.5% over the past 12 months. Excluding food and energy, core prices rose by 0.3%, higher than a target of 0.2%.
Industrial production in the U.S. showed an unexpected decline in January. The measure fell by 0.3% to a reading of 104.6 in January, worse than an expected flat reading. Production rose 0.8% in December.
Business inventories in December rose by 0.4% to $1,835.7 billion, according to the Census Bureau. The increase was in line with consensus following a 0.8% rise in November.
Manufacturing conditions in the New York region significantly improved in February, according to the Empire State Manufacturing Index. The index increased to 18.7 in February from 6.5 in January.
Boston Fed President Eric Rosengren will deliver the keynote speech at the New York Association Economics Luncheon on Wednesday, Philadelphia Fed President Patrick Harker will discuss the economic outlook at La Salle University, and New York Fed President William Dudley will speak at the Cornell College of Business Annual New York City Prediction Event.
Cigna (CI - Get Report) and Anthem (ANTM - Get Report) traded slightly higher after the companies called off a proposed merger. Cigna terminated the merger agreement and has asked Anthem to pay a $1.85 billion reverse termination fee. Cigna is requesting an additional $13 billion in damages.
Fortress Investment Group (FIG) rocketed 28.5% higher after SoftBank Group agreed to buy the asset manager in a deal worth $3.3 billion. Fortress shareholders will receive $8.08 a share, a 39% premium to the closing price on Monday.
Billionaire investor Warren Buffett increased his stake in Apple (AAPL - Get Report) during the fourth quarter. Buffett's Berkshire Hathaway (BRK.A - Get Report) holding company reported owning 57.4 million shares of Apple as of Dec. 31, up from 15.2 million shares of the tech giant at the end of the third quarter. Berkshire Hathaway's stake is now worth about $7.74 billion. Apple shares closed Tuesday at a record for the second day in a row. The stock rose 0.5% on Wednesday.
Berkshire Hathaway also added to all of its airline investments. At the end of 2016, Berkshire held 45.5 million shares of American (AAL) , 60 million shares of Delta (DAL - Get Report) , 43.2 million shares of Southwest (LUV - Get Report) and nearly 29 million shares of United Continental (UAL - Get Report) .
Fossil Group (FOSL - Get Report) tanked 16% after a disappointing quarter ravaged by currency exchange woes. The accessories maker also guided for a weak full year and said "several factors will cause volatility," primarily foreign exchange and restructuring charges. Fossil said it anticipates full-year sales in a range of a 6.5% drop to breakeven and for adjusted earnings of $1 to $1.70 a share. Analysts anticipate full-year earnings of $1.73 a share.
The weak quarter and guidance prompted Wells Fargo to downgrade Fossil to underperform from market perform. Analysts said they had concerns over the company's wearables business, particularly in light of weaker-than-expected sales in the fourth quarter. Sales weakness came in spite of "a much-hyped push in wearables (that was three years in the making)."
SodaStream (SODA) jumped 6.3% after a far better quarter than analysts expected. Earnings surged to 71 cents a share from 13 cents in the year-ago quarter, trouncing consensus of 36 cents. Revenue jumped 17% to $131.8 million and topped estimates of $125.5 million. The homemade seltzer company reported an 18% increase in sales in Western Europe and a 20% increase in the Americas.
PepsiCo (PEP - Get Report) was down 1% after topping analysts' estimates on its top- and bottom-lines over its recent quarter. Fourth-quarter earnings fell to 97 cents a share from $1.17 a share in the year-ago quarter, but came in at $1.20 a share when excluding one-time charges. Analysts anticipated adjusted earnings of $1.16. Sales rose by 5% to $19.52 billion, exceeding consensus of $4.7 billion. Frito-Lay North America sales increased 10%, while North America beverage sales rose 8%. Pepsi anticipates fiscal 2017 adjusted earnings of $5.09 a share, falling short of $5.16 consensus.