US close: Stocks end on mixed note, despite Fed and tax cuts
Stocks finished on a mixed note after two rate-setters dissented from the Federal Reserve's widely-expected decision to hike rates.
Investors were apparently also unimpressed by reports that Republicans in the House and Senate had agreed on the final version of a proposal for tax cuts.
By the close of trading in New York, the Dow Jones Industrial Average was 0.33% or 80.63 points higher to 24,585.43, albeit alongside a dip of 0.05% or 1.26 points to 2,662.85 on the S&P 500. In parallel, the Nasdaq Composite was ahead by 0.20% or 13.48 points to 6,875.80.
Meanwhile, as of 2256 GMT the yield on the benchmark 10-year US Treasury note was down by six basis points to 2.34% and the US dollar spot index by 0.69% to 93.45.
Predictably, weakness in the Greenback sparked buying in gold futures, with the February 2018 COMEX contract trading higher by 0.75% to $1,258/oz..
As expected, the Federal Open Market Committee decided to raise the range for the Fed funds rate by 25 basis points on Wednesday evening, to between 1.25% and 1.50%.
Policymakers also stuck by their projections calling for three more interest rate hikes in 2018, as they bumped up their forecast for GDP growth next year, to 2.5%, on the expected passage of Republicans' tax cut plans, the details of which were now expected later in the week.
However, two FOMC members, Chicago Fed chief Charles Evans and his opposite number in Minneapolis, Neel Kashkari, both dissented, instead casting their ballots in favour of no change in rates.
"Despite factoring in the imminent fiscal stimulus into their GDP growth projections for 2018, however, officials still anticipate only three more rate hikes next year. In contrast, we suspect that a slightly stronger rebound in inflation next year will ultimately persuade the Fed to hike rate four times in 2018," said Paul Ashworth, chief economist at Capital Economics.
Earlier in the session, the Department of Labor reported that the 'core' CPI rate advanced at a 0.1% month-on-month clip in November, leading to a one tenth of a percentage point slip in the year-on-year pace to 1.7% (consensus: 1.8%).
Given rising short-term interest rates and estimates that the neutral real rate of interest was now quite lower than before the financial crisis, economists were understandably a tad more cautious in the wake of Wednesday's weaker than forecast reading on CPI.
Thus, in a note sent to clients, Barclays's Blerina Uruci said: "After returning to positive prints briefly, monthly core goods prices decline again in November and the pace of increase in core services slowed.
In the background, investors were also mulling news that Democrat Doug Jones won Alabama's Senate election on Tuesday night, defeating Republican Roy Moore, who was backed by Donald Trump. The victory for Jones will reduce the Republican Senate majority to 51-49 from 52-48, prompting fears that it will be harder for the Republicans to push through major overhauls such as tax reform.
In corporate news, drug-maker Eli Lilly laid-out its sales guidance for the full-year 2018, predicting revenues would be in a range between $23.0bn and $23.5bn (consensus: $23.1bn).
Shares of Amgen were also trading on the frontfoot, after it announced a 15% increase in its first quarter 2018 dividend.
To the downside, stock in biotech group Proteostasis Therapeutics was weaker in pre-market trade after announcing late on Tuesday that it plans to sell 7m shares of its common stocks.
Elsewhere, shares of ship builder Nordic American Tankers tumbled after saying it plans to sell $100m shares through a public offering.
Dow Jones - Risers
Caterpillar Inc. (CAT) $148.57 3.59%
Nike Inc. (NKE) $64.30 3.43%
Coca-Cola Co. (KO) $45.90 1.35%
Procter & Gamble Co. (PG) $90.88 1.15%
Wal-Mart Stores Inc. (WMT) $97.79 1.10%
3M Co. (MMM) $239.12 1.07%
Unitedhealth Group Inc. (UNH) $224.35 0.84%
McDonald's Corp. (MCD) $173.55 0.77%
Home Depot Inc. (HD) $183.03 0.68%
United Technologies Corp. (UTX) $124.30 0.66%
Dow Jones - Fallers
International Business Machines Corp. (IBM) $153.91 -1.81%
American Express Co. (AXP) $97.78 -1.59%
JP Morgan Chase & Co. (JPM) $105.51 -1.25%
General Electric Co. (GE) $17.76 -0.84%
Goldman Sachs Group Inc. (GS) $255.56 -0.82%
Travelers Company Inc. (TRV) $133.52 -0.59%
Verizon Communications Inc. (VZ) $52.89 -0.56%
Dowdupont Inc. (DWDP) $70.56 -0.32%
Merck & Co. Inc. (MRK) $56.91 -0.28%
Microsoft Corp. (MSFT) $85.35 -0.27%
S&P 500 - Risers
CenturyLink Inc. (CTL) $16.75 6.69%
Mattel Inc. (MAT) $15.59 6.63%
Freeport-McMoRan Inc (FCX) $16.32 3.88%
Hasbro Inc (HAS) $95.45 3.73%
Caterpillar Inc. (CAT) $148.57 3.59%
Nike Inc. (NKE) $64.30 3.43%
Newmont Mining Corp. (NEM) $35.75 3.35%
Vertex Pharmaceuticals Inc. (VRTX) $144.80 2.76%
Target Corp. (TGT) $62.67 2.70%
Adobe Systems Inc. (ADBE) $176.83 2.49%
S&P 500 - Fallers
Archer-Daniels-Midland Co. (ADM) $40.03 -4.12%
Twenty-First Century Fox Inc Class A (FOXA) $32.75 -3.96%
Ralph Lauren Corp (RL) $96.22 -3.91%
Newfield Exploration Co (NFX) $29.07 -3.87%
Twenty-First Century Fox Inc Class B (FOX) $32.34 -3.75%
Spectra Energy Corp. (SE) $12.73 -3.56%
F5 Networks Inc. (FFIV) $131.00 -3.31%
Transocean Ltd. (RIG) $9.82 -3.25%
Hess Corp. (HES) $44.10 -2.88%
Unum Group (UNM) $54.95 -2.59%
Nasdaq 100 - Risers
Mercadolibre Inc. (MELI) $318.94 8.07%
JD.com, Inc. (JD) $40.80 5.81%
NetEase Inc. Ads (NTES) $357.80 3.85%
Hasbro Inc (HAS) $95.45 3.73%
Incyte Corp. (INCY) $98.10 2.83%
Vertex Pharmaceuticals Inc. (VRTX) $144.80 2.76%
Adobe Systems Inc. (ADBE) $176.83 2.49%
Western Digital Corp. (WDC) $83.63 2.27%
Dentsply International Inc. (XRAY) $66.06 1.65%
Wynn Resorts Ltd. (WYNN) $164.85 1.56%
Nasdaq 100 - Fallers
Twenty-First Century Fox Inc Class A (FOXA) $32.75 -3.96%
Twenty-First Century Fox Inc Class B (FOX) $32.34 -3.75%
PACCAR Inc. (PCAR) $70.10 -2.52%
Nvidia Corp. (NVDA) $186.18 -2.44%
Comcast Corp. (CMCSA) $38.58 -2.35%
Electronic Arts Inc. (EA) $105.54 -1.97%
Shire Plc Ads (SHPG) $147.31 -1.41%
Dish Network Corp. (DISH) $48.99 -1.29%
Liberty Global plc Series C (LBTYK) $30.77 -1.16%
Symantec Corp. (SYMC) $28.63 -1.00%