US close: Markets higher as Fed hints at imminent unwinding
US stocks finished higher on Wednesday thanks to some well-received corporate news, as investors looked ahead the Federal Reserve statement on interest rates and its balance sheet unwinding.
The Dow Jones Industrial Average finished up 0.45% at 21,711.01, the S&P 500 ended 0.03% higher at 2,477.83 and the Nasdaq 100 was 0.34% firmer at 5,950.73.
Although the earnings calendar was busy, investors spent much of the day looking ahead to the FOMC rate announcement late in the session, in which the committee stood pat on rates as expected.
Traders were perhaps more keen to look for any clues as to when the Federal Reserve would begin to unwind its mammoth $4.5trn balance sheet, with the FOMC hinting it could begin next month.
“The Committee expects to begin implementing its balance sheet normalization program relatively soon, provided that the economy evolves broadly as anticipated,” the committee’s statement read.
The FOMC had previously indicated it planned to wind down its balance sheet sometime this year, with the addition of “relatively soon” though to indicate the unwinding was imminent.
Some market watchers considered it a more dovish statement than expected.
“The Fed's assessment of the inflation backdrop amounted to a very modest downgrade of the overall inflation situation and could signal slightly more concern on the part of the Fed with respect to their forecast for inflation,” said Commonwealth FX chief market analyst Omer Esiner.
Markus Schomer, chief economist at Pinebridge Investments, described it as one of the “most boring” Fed statements he’d seen in some time.
“On the balance sheet, we had assumed it would start October, but it doesn't matter whether it's September, October or November.
“What will matter going forward is growth the GDP report on Friday and other data like retail sales.”
On the data front, figures from the Commerce Department showed new home sales rose 0.8% from May's downwardly-revised 605,000 to a seasonally-adjusted annual rate of 610,000.
That was slightly below expectations for an increase to 615,000.
Meanwhile, the median price of new houses sold in June was $310,800, down 3.3% from a year ago.
The seasonally-adjusted estimate of new houses for sale at the end of June was 272,000, which represents a supply of 5.4 months at the current sales rate.
In corporate news, chipmaker Advanced Micro Devices surged 4.61% after it released better-than-expected earnings late on Tuesday and lifted its guidance.
Telecom AT&T rose 5% while Chipotle Mexican Grill sank 2.3%, after both reported stronger-than-forecast earnings late on Tuesday.
Biotech firm Amgen lost 2.76% despite topping estimates with its second-quarter results and insurer Anthem retreated 2.93% after its quarterly earnings beat forecasts but its revenue disappointed.
Ford Motor was on the back foot by 1.86% despite upgrading its earnings forecasts for the year and posting better-than-expected second-quarter numbers, while Coca-Cola was 1.13% firmer after a second-quarter earnings beat.
Dow Jones - Risers
Boeing Co. (BA) $233.45 9.88%
Coca-Cola Co. (KO) $45.74 1.11%
Verizon Communications Inc. (VZ) $44.40 0.95%
Visa Inc. (V) $100.85 0.86%
Chevron Corp. (CVX) $105.12 0.70%
General Electric Co. (GE) $25.59 0.59%
Walt Disney Co. (DIS) $106.94 0.49%
Wal-Mart Stores Inc. (WMT) $78.90 0.48%
Apple Inc. (AAPL) $153.46 0.47%
Goldman Sachs Group Inc. (GS) $222.25 0.30%
Dow Jones - Fallers
Nike Inc. (NKE) $58.36 -1.73%
McDonald's Corp. (MCD) $156.51 -1.61%
Cisco Systems Inc. (CSCO) $31.66 -1.43%
Travelers Company Inc. (TRV) $126.00 -1.15%
JP Morgan Chase & Co. (JPM) $91.93 -0.94%
Merck & Co. Inc. (MRK) $61.80 -0.90%
Caterpillar Inc. (CAT) $113.52 -0.89%
E.I. du Pont de Nemours and Co. (DD) $84.81 -0.80%
United Technologies Corp. (UTX) $119.53 -0.73%
Johnson & Johnson (JNJ) $130.95 -0.71%
S&P 500 - Risers
Boeing Co. (BA) $233.45 9.88%
United States Steel Corp. (X) $26.20 7.20%
AT&T Inc. (T) $38.06 5.00%
Biogen Inc (BIIB) $295.61 4.47%
Ameriprise Financial Inc. (AMP) $144.65 4.18%
Ryder System Inc. (R) $76.46 3.97%
Electronic Arts Inc. (EA) $118.00 3.82%
Bed Bath & Beyond Inc. (BBBY) $29.24 3.29%
Activision Blizzard Inc. (ATVI) $62.64 2.77%
Automatic Data Processing Inc. (ADP) $105.98 2.71%
S&P 500 - Fallers
Akamai Technologies Inc. (AKAM) $45.49 -14.62%
Universal Health Services Inc. (UHS) $112.98 -8.12%
Robert Half International Inc. (RHI) $44.25 -7.45%
Juniper Networks Inc. (JNPR) $28.03 -6.34%
Corning Inc. (GLW) $30.42 -5.32%
Wynn Resorts Ltd. (WYNN) $132.00 -5.02%
Nucor Corp. (NUE) $58.12 -4.60%
Gen Dynamics Corp. (GD) $194.66 -4.37%
CF Industries Holdings Inc. (CF) $28.88 -4.28%
Hess Corp. (HES) $43.47 -4.19%
Nasdaq 100 - Risers
Biogen Inc (BIIB) $295.61 4.47%
Electronic Arts Inc. (EA) $118.00 3.82%
Ctrip.Com International Ltd. Ads (CTRP) $59.72 3.18%
JD.com, Inc. (JD) $45.87 3.17%
Activision Blizzard Inc. (ATVI) $62.64 2.77%
Incyte Corp. (INCY) $137.19 2.72%
Automatic Data Processing Inc. (ADP) $105.98 2.71%
Discovery Communications Inc. Class A (DISCA) $26.58 2.51%
Mercadolibre Inc. (MELI) $286.02 2.42%
Lam Research Corp. (LRCX) $168.34 2.36%
Nasdaq 100 - Fallers
Akamai Technologies Inc. (AKAM) $45.49 -14.62%
Wynn Resorts Ltd. (WYNN) $132.00 -5.02%
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $247.24 -3.65%
Amgen Inc. (AMGN) $175.89 -2.76%
Seagate Technology Plc (STX) $32.34 -2.59%
Viacom Inc. Class B (VIAB) $34.37 -1.83%
Walgreens Boots Alliance, Inc. (WBA) $78.68 -1.72%
Cisco Systems Inc. (CSCO) $31.66 -1.43%
Cerner Corp. (CERN) $64.62 -1.42%
CA Inc. (CA) $34.65 -1.08%