US close: Fruitless day as Apple juice offset by hawkish Fed

US stocks had a fruitless day on Wednesday despite strong gains for Apple, as the Federal Reserve delivered a more hawkish statement than many in the market had expected and oil prices were slicked back down.

The Dow Jones failed to hold onto early and late gains to finish just shy of parity at 18,464.23, a fall of just a handful of points on the day; the S&P swung from near all-time highs at the open to end down 0.12% at 2,166.58; the Nasdaq closed at its highest point in 2016, up 0.58% at 5,139.81.

Crude oil prices collapsed again late in the session, with West Texas Intermediate sliding 2.4% to $41.90 a barrel and Brent crude down 3.3% at $43.38.

In early trading, sentiment had been boosted by Japanese Prime Minister Shinzo Abe hinting that he wanted to unveil a large stimulus package ahead of the weekend. He said on the government would deliver a stimulus package of Y28tn ($265bn), half of which would comprise fiscal measures. The news comes ahead of the Bank of Japan’s policy announcement on Friday.

But later, US Fed rate setters stood pat but said they felt short-term risks to the economic outlook had diminished and that the recovery of the job market had regained momentum, suggesting they were leaving the door open to raise rates possibly as soon as September's meeting.

The Federal Open Market Committee (FOMC) statement noted that “job gains were strong in June following weak growth in May” and that “household spending has been growing strongly”, after the considerable slowdown in May employment had previously caused concern in the previous meeting.

Barclays economists said the solid rebound in June employment seemed to have given the committee comfort that weak employment growth in May was an aberration.

"We view the FOMC statement as somewhat more hawkish than we had expected, although our expectation of changes to the statement closely mirrors those in the actual release.

"The tone of the statement reaffirms our view that the FOMC is likely to raise its policy rate at the September meeting, so long as the labor market continues to perform."

While the committee remains concerned about inflation, inflation expectations, and the international environment, Barclays noted that these concerns are no more pressing than they were at the time of the December meeting that saw the FOMC increase its policy rate and signal four additional hikes in 2016.

Earlier, data from the Commerce Department showed US durable goods orders fell more than expected in June.

Durable goods orders were down 4% on the previous month to $219.8bn following a 2.8% drop in May. Economists had been expecting a 1.1% drop. Excluding transport, new orders declined 0.5%, missing expectations of a 0.3% increase. They were down 3.9% excluding defence.

In corporate news, Apple stock was back at level not seen since its worrying second-quarter report April, up around 7% after third-quarter earnings posted overnight beat estimates. The company reported earnings per share of $1.42 and revenues of $42.4bn and said it sold 40.4m iPhones, which was a touch ahead of forecasts for 40.02.

Boeing was also in the black despite reporting its first quarterly loss in nearly seven years.

It was a very different story for Twitter, however, which tumbled after the social media player reported disappointing earnings for the second quarter late on Tuesday.

Likewise software group Akamai Technologies fizzled lower after its quarterly guidance fell well below analyst estimates.

Coca-Cola lost some of its fizz after the soft drinks company’s quarterly revenue missed expectations.

After hours trading saw Facebook well liked as its numbers all beat analyst forecasts, with revenue of $6.44bn, net income of 71 cents a share, and adjusted earnings of 97 cents a share.

Dow Jones - Risers

Apple Inc. (AAPL) $103.43 7.00%
Caterpillar Inc. (CAT) $84.20 1.75%
Boeing Co. (BA) $135.94 0.81%
Verizon Communications Inc. (VZ) $55.22 0.74%
Merck & Co. Inc. (MRK) $58.58 0.39%
American Express Co. (AXP) $64.60 0.36%
3M Co. (MMM) $178.21 0.31%
JP Morgan Chase & Co. (JPM) $64.32 0.30%
Pfizer Inc. (PFE) $36.88 0.14%
Visa Inc. (V) $78.54 0.06%

Dow Jones - Fallers

Coca-Cola Co. (KO) $43.41 -3.28%
McDonald's Corp. (MCD) $119.37 -1.92%
Nike Inc. (NKE) $55.77 -1.06%
Travelers Company Inc. (TRV) $116.52 -0.96%
Procter & Gamble Co. (PG) $84.46 -0.94%
Microsoft Corp. (MSFT) $56.28 -0.85%
Intel Corp. (INTC) $34.81 -0.81%
Exxon Mobil Corp. (XOM) $90.79 -0.81%
General Electric Co. (GE) $31.29 -0.57%
Wal-Mart Stores Inc. (WMT) $73.31 -0.57%

S&P 500 - Risers

Garmin Ltd. (GRMN) $51.84 11.75%
United States Steel Corp. (X) $25.50 11.13%
State Street Corp. (STT) $63.70 9.22%
Illumina Inc. (ILMN) $162.33 8.15%
Apple Inc. (AAPL) $103.43 7.00%
Edwards Lifesciences Corp. (EW) $114.71 5.87%
Zions Bancorporation (ZION) $27.99 5.27%
Allergan plc (AGN) $260.49 4.64%
Qorvo, Inc. (QRVO) $62.97 4.29%
Regeneron Pharmaceuticals Inc. (REGN) $414.39 4.05%

S&P 500 - Fallers

Akamai Technologies Inc. (AKAM) $50.31 -13.39%
Robert Half International Inc. (RHI) $36.86 -11.06%
Total System Services Inc. (TSS) $51.19 -9.28%
Wyndham Worldwide Corp. (WYN) $70.68 -8.43%
Ryder System Inc. (R) $64.61 -7.38%
Juniper Networks Inc. (JNPR) $22.58 -6.77%
Level 3 Communications, Inc. (LVLT) $52.63 -6.00%
Equity Residential (EQR) $65.89 -5.63%
Universal Health Services Inc. (UHS) $130.95 -5.30%
Linear Technology Corp. (LLTC) $59.18 -5.30%