The stock market had an unusually moderate reaction to the Fed's decision to leave interest rates unchanged Wednesday afternoon. Investors now wait for Chair Jerome Powell's press conference, which often moves stocks more than the Fed announcement itself.
The Nasdaq composite gained 0.6% as it added some room above its 200-day moving average. The S&P 500 climbed 0.4% after the Fed statement was issued.
Gains weren't evenly distributed when you take away the biggest stocks. Most of the Magnificent Seven stocks were higher. But the Direxion Nasdaq 100 Equal Weight ETF was flat and the Invesco S&P 500 Equal Weight ETF was down 0.3%.
The Dow Jones Industrial Average rose 0.3%. Dow component Walmart climbed past the 164.33 buy point of a cup with handle, but volume was weak.
The small-cap Russell 2000 lagged with a 0.5% decline.
Volume fell on the Nasdaq and the New York Stock Exchange in the stock market today compared with the same time on Tuesday.
The Innovator IBD 50 ETF trimmed gains to 0.7%. Airline jet engine supplier FTAI Aviation climbed above the 37.98 buy point of a flat base. Volume was flat, but the relative strength line made a new high.
Parsons led the IBD 50 with a 7% increase after the infrastructure and national security services firm reported a 44% increase in third-quarter profit and raised its outlook on full-year revenue, cash flow from operations, and earnings before taxes, interest, depreciation and amortization (or EBITDA). The stock had faded from a 57.49 buy point but is now extended above it.
Stock Market Reacts To Fed, Powell
As everyone expected, the Fed left the federal funds rate unchanged at a range of 5.25%-5.5%. Policymakers noted that job gains have moderated but remain strong, and economic activity is expanding.
"The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals," the statement read.
Powell's remarks will be studied carefully for hints on whether the Federal Reserve is contemplating an end to its tightening policy.
The 10-year Treasury yield fell 7 basis points to 4.80%, rebounding from a brief drop immediately after the Fed announcement.
The S&P Global U.S. Manufacturing PMI snapped a five-month streak of declines, as new orders rose for the first time in six months. The job openings report for September came in at 9.553 million, above forecasts and above the prior month's 9.497 million. The manufacturing ISM index fell to 46.7 in October from 49.0 the prior month.
In other economic news, the ADP National Employment Report showed 113,000 jobs were added in October, led by education and health care. That's well below the Econoday consensus forecast of 145,000 but higher than the 89,000 in the previous month's report.
"Economic data out this morning point to slower economic activity and hiring in October, likely reflecting the impact of the UAW strike on the auto industry and the Midwest," said Bill Adams, chief economist for Comerica Bank. "The job openings report shows a labor market that is about as tight as before the pandemic: There are more job openings per job seeker, but slower hiring, and the quits rate is the same."
Paycom Among Market Losers
The stock market continues to wade through hundreds of earnings reports.
Advanced Micro Devices surged 7.5% in heavy volume and reclaimed its 200-day moving average. Late Tuesday, the chip company reported sales and earnings that beat third-quarter expectations, but its current-quarter outlook missed estimates.
CDW pared losses after a brief trip below the 200-day line. The technology products reseller and services provider beat profit estimates but missed sales expectations for the third quarter. The company raised its quarterly dividend to 62 cents from 59 cents a share.
Paycom Software plummeted nearly 38% in its largest single-day loss ever, according to Dow Jones Market Data. Early Wednesday, the company's third-quarter revenue missed expectations, and the human resources software maker gave a weak sales outlook for 2024. The stock is now at its lowest point since February 2019.
First Solar reversed lower after an early jump. Late Tuesday, the solar panel maker reported adjusted earnings of $2.50 per share, vs. a year-ago loss of 46 cents a share. Revenue climbed 27% to $801 million, which was below estimates.
Former Highflier Sinks To $1
WeWork sold off 50% and is trading around 1 per share. At its peak in 2021, the shared office space provider traded as high as 598.80. The Wall Street Journal reported the company plans to file for bankruptcy protection.
Sales of Chinese electric-vehicle companies rose sharply in October; the stocks were mixed.
BYD stock fell 1.6%. Its monthly vehicle deliveries topped 300,000 for the first time and overseas deliveries rose to a record high.
Li Auto rose 4% in heavy midday volume. It sold 40,422 electric vehicles in October, the seventh straight record monthly high.
Nio rose 0.3% and remained near 52-week lows. Its 16,074 deliveries were up 59.8% vs. a year earlier. XPeng rose 6% after reporting it sold a record 20,002 vehicles. Deliveries surged 292% vs. a year earlier.
Elsewhere in the stock market, Crispr Therapeutics jumped more than 10% after a Food and Drug Administration advisory panel gave favorable comments on the gene-editing drug exa-cel as a treatment for sickle-cell disease. Crispr and partner Vertex Pharmaceuticals are developing the drug. Vertex shares rose 0.8%.
