The Dow Jones Industrial Average lifted off session lows and eked out a 0.2% gain by the close Wednesday, even after the Federal Reserve's minutes indicated one more rate hike might be necessary. Markets were muted in New York despite tumult in Washington, where Republicans on Capitol Hill offered a candidate for the top job in the House of Representatives.
Minutes of the Fed's September meeting showed members expected the inflation rate to be 3.5% at the end of the year and slowing further in upcoming years to the 2% target rate in 2026.
A majority viewed one more interest rate hike appropriate, though some thought it unlikely.
Meanwhile, House Republicans nominated Majority Leader Steve Scalise, R-La., as speaker after the historic ouster of Rep. Kevin McCarthy, R-Calif., last week. Scalise narrowly beat Rep. Jim Jordan, R-Ohio, 113-99 among Republicans for the nomination, so it is unclear whether he can collect enough votes to win the chamber's top job.
In stocks, the Dow Jones index continued to battle with its 200-day moving average after falling below the threshold in late September. Further, the Nasdaq finished just above the 50-day line after closing just below that mark on Tuesday. The tech-dominated index rose 0.7% on Wednesday. The close above the 50-day line may be taken as a confirmation of the current rally after Friday's follow-through day.
The S&P 500 also reversed from early losses and gained 0.4% in the stock market today. But small caps on the Russell 2000 index ended 0.2% lower, though a follow-through day is still possible.
Oil Prices, Treasury Yields Fall
Volume was higher on the New York Stock Exchange and lighter on the Nasdaq compared with the same time on Tuesday.
In the early going, advancers beat decliners on both the NYSE and the Nasdaq. But that reversed on the Nasdaq, and decliners outnumbered advancers at the finish. In the Nasdaq 100, Dexcom trailed while Dow Jones component Amgen led. Also, the Innovator IBD 50 exchange traded fund gained 0.5%
Elsewhere, crude oil fell over 2% to $83.97 a barrel. And the yield on the benchmark 10-year Treasury note continued its fall. It dropped 5 basis points or 4.6%.
Earlier in the day, the producer price index for September came in at 0.5%, higher than estimates for 0.3%, and showing continued inflationary pressures.
The CPI inflation report for September is due Thursday, and is expected to show a 0.3% month-on-month increase. The annual inflation rate is seen dropping to 3.6%, down from a 3.7% year-over-year climb for August, according to Econoday.
Dow Jones Stocks
JPMorgan Chase is nearing its 50-day line in a flat base with a buy point of 159.38. Earnings are due Friday.
Amgen rose after Leerink analysts upgraded the stock to outperform and raised the price target to 318 from 267. A strong pipeline of drugs and the company's recent acquisition of Horizon Therapeutics are tailwinds. Shares are extended now.
In the IBD 50, Eli Lilly continued a seven-day winning streak amid a strong rebound from the 50-day line. LLY also is on the IBD Leaderboard.
Adobe also rose as the desktop software company unveiled new artificial-intelligence enhancements to video at its Max Creativity Conference.
Leaderboard holding Meta Platforms broke out of a consolidation at a buy point of 326.20. The relative strength line is at a new high.
Indexes At Key Levels With CPI Data Due; What To Do Now
Outside Dow Jones: Cava Group Gets Overweight Rating
Morgan Stanley gave Cava Group an overweight rating with a price target of 41. Earlier, the brokerage's analysts had an equal weight rating on the fast-casual Mediterranean restaurant chain but a higher price target of 45.
Cava went public in June this year. Analysts contend short sellers and expiring lockup periods drove the stock down 30% by September. Wall Street sees near-term catalysts and long-term fundamental growth. Cava is up more than 5% so far in October but remains below an emerging 50-day line.
HP increased its quarterly dividend and gave its fiscal 2024 outlook. It now expects midpoint earnings of $3.45 a share for the year and plans to return 100% of $3.35 billion in median free cash flows to shareholders. Shares pared some early gains and ended 1% higher.
Sandal maker Birkenstock pared some losses after debuting on the NYSE and closed near its initial price of 41 a share.
And in machinery and tools, Fastenal reports Thursday morning. Shares are holding the 50-day line of support ahead of earnings.
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