From Briefing.com: 4:10 pm : The major averages ended the midweek session with slim gains after showing some intraday volatility in reaction to the release of the latest policy directive from the Federal Open Market Committee. The S&P 500 added 0.1%, while the relative strength among small caps sent the Russell 2000 higher by 0.3%.
Equities spent the first half of the session near their flat lines as participants stuck to the sidelines ahead of the FOMC statement, which conveyed no changes to the Fed's current policy course. The indices surged after the statement crossed the wires, but returned near their flat lines by the close.
As expected, the Fed reduced the monthly pace of its asset purchases by $10 billion to $15 billion, setting expectations for the program to be wound down at the next meeting. Furthermore, the Fed maintained the "considerable time" language in its forward guidance, suggesting the first rate hike remains somewhat distant. On that note, the economic projections that were also released indicated the Fed sees the fed funds rate at 1.375% at the end of 2015.
The policy statement weighed on Treasuries (10-yr yield +3 bps to 2.62%), while giving a boost to the greenback. The Dollar Index (+0.6%) climbed to its best level since last June at the expense of other major currencies. Notably, the dollar/yen pair soared from the 107.15 area to 108.30.
Seven of ten sectors posted gains with materials (+0.6%) ending in the lead. The growth-sensitive sector was underpinned by steelmakers after U.S. Steel (X 45.61, +4.20) boosted its guidance. The Market Vectors Steel ETF (SLX 49.20, +0.43) advanced 0.9%.
Meanwhile, the other commodity-linked sector-energy (-0.5%)-ended at the bottom of the leaderboard following its recent outperformance. The sector narrowed its week-to-date gain to 1.4% and was pressured by a 0.6% decline in the price of crude oil ($94.33/bbl).
Elsewhere, the remaining cyclical sectors ended on a mixed note. Financials (+0.4%), industrials (+0.4%), and technology (+0.2%) displayed relative strength, while consumer discretionary (unch) ended a bit behind the broader market.
The industrial sector outperformed from the start with better than expected earnings from FedEx (FDX 159.71, +5.05) providing support. Shares of FDX jumped 3.3%, while the broader Dow Jones Transportation Average gained 1.0%. Airlines bucked the trend, which was a bit surprising considering the decline in the price of crude. Delta Air Lines (DAL 38.94, -0.58) and JetBlue Airways (JBLU 11.20, -0.21) lost 1.5% and 1.9%, respectively.
Also of note, the discretionary sector finished just behind the market, but that masked the strength among homebuilders. The industry group rallied in reaction to better than expected results from Lennar (LEN 41.40, +2.27). The stock surged 5.8%, while the iShares Dow Jones US Home Construction ETF (ITB 24.13, +0.54) settled higher by 2.3%.
Today's participation was ahead of recent averages with more than 650 million shares changing hands at the NYSE.
Economic data included CPI, NAHB Housing Market Index, Q2 Current Account Balance, and the weekly MBA Mortgage Index:
The CPI report for August revealed a 0.2% decline, while the Briefing.com consensus expected an unchanged reading
This was the first decline in total CPI since April 2013, driven by a 2.6% decline in the energy index
Core CPI, meanwhile, was flat against a 0.2% uptick expected by the consensus
The NAHB Housing Market Index for September rose to 59 from 55, while the Briefing.com consensus expected an increase to 56
The current account deficit for the second quarter totaled $98.50 billion while the Briefing.com consensus expected the deficit to hit $114.50 billion
The first quarter deficit was revised to $102.10 billion from $111.20 billion
The weekly MBA Mortgage Index jumped 7.9% to follow last week's 7.2% drop
Tomorrow, weekly Initial Claims (Briefing.com consensus 305K) and August Housing Starts (consensus 1045K)/Building Permits (expected 1054K) will be released at 8:30 ET, while the Philadelphia Fed survey for September (consensus 23.5) will cross the wires at 10:00 ET.
Nasdaq Composite +9.2% YTD
S&P 500 +8.3% YTD
Dow Jones Industrial Average +3.5% YTD
Russell 2000 -0.8% YTD
DJ30 +24.88 NASDAQ +9.43 SP500 +2.59 NASDAQ Adv/Vol/Dec 1564/1.66 bln/1156 NYSE Adv/Vol/Dec 1582/653.3 mln/1502 3:35 pm :
Dec gold chopped around near the unchanged level for most of today's pit trade as investors awaited the FOMC policy statement released at 14:00 ET. The yellow metal touched a session high of $1240.10 per ounce in early morning action but later dipped to a session low of $1234.50 per ounce and settled 60 cents below the break-even line at $1235.60 per ounce.
Dec silver erased slight early morning losses as it lifted from its session low of $18.64 per ounce. It touched a session high of $18.75 per ounce shortly before settling unchanged at $18.73 per ounce.
A few minutes ago, both gold and silver extended losses and fell to new lows on the day. Dec gold is now -0.8% at $1227.40/oz, Dec silver -0.9% at $18.55/oz
Oct crude oil touched a session high of $95.03 per barrel in early morning action but retreated back into negative territory.
The energy component traded as low as $93.74 per barrel after the EIA reported that for the week ending Sep 12, crude oil inventories had a build of 3.673 mln barrels when a draw of 1.5-1.6 mln barrels was anticipated. Unable to find buying support, it settled with a 0.6% loss at $94.33 per barrel.
Oct natural gas chopped around slightly above the unchanged line today. It touched a session high of $4.04 per MMBtu and settled with a 0.5% gain at $4.01 per MMBtu.
4:16 pm Interdigital Comm: Chairman Steven T. Clontz to retire from Board (IDCC) : Co announced that Steven T. (Terry) Clontz, Chairman of the Board, has informed the company of his intention to retire from the company's Board of Directors at the end of his term, which extends until the June 2015 Annual Meeting of Shareholders. He will be succeeded as Chairman by S. Douglas (Doug) Hutcheson at that time. Mr. Hutcheson is CEO of Laser Inc. and former CEO of Leap Wireless and its operating subsidiary, Cricket Wireless, which were acquired by AT&T in March 2014. He joined InterDigital's Board of Directors in July 2014.
12:07 pm Notable movers of interest (:SCANX) : The following are some of today's most notable movers of interest, categorized by market capitalization (large cap over $10 billion and mid cap between $2-10 billion) and ranked by % change (all stocks over 100K average daily volume).
Large Cap Gainers
ENDP (68.76 +5.51%): Co delivered a proposal to acquire Auxilium Pharma (AUXL) for $28.10 per share in cash and stock (transaction valued at $2.2 bln).
DD (68.65 +4.28%): Trian Partners delivered letter and white paper summary to DD Board; said conglomerate structure is destroying shareholder value; suggested initiatives it believes can double share value in three years; DD issued statement regarding Trian; said 'while it is our policy not to comment on discussions with specific shareholders, we have had a constructive dialogue with Trian'.
NUE (57.75 +3.84%): Sees Q3 EPS $0.70-0.75 vs $0.62 consensus.
Large Cap Losers
SNE (18.99 -6.22%): Co cut FY15 guidance; will not pay dividend.
MBT (16.98 -4.34%): Downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $19 from $22.
SXL (47.65 -4.63%): Priced offering of 7.7 mln common unit at $48.46 per unit.
Mid Cap Gainers
DRC (72.76 +7.19%): Sulzer confirmed that it is engaged in non-exclusive discussions with DRC regarding a potential transaction; initiated with a Buy at KeyBanc Capital Mkts; tgt $80.
X (45.29 +9.37%): Co announced strategic actions and updated Q3 outlook - expects significant improvement in op income for reportable segments and other businesses; tgt raised to $58 from $47 at Goldman.
LEN (41.44 +5.9%): Beat on EPS by $0.11, beat on revs; reaffirmed FY14 delivery guidance.
Mid Cap Losers
RAX (33.01 -16.08%): Co ended formal evaluation of M&A transactions; focus remains on managed cloud market leadership; appointed Taylor Rhodes as CEO; downgraded to Sell from Underperform at Credit Agricole.
SKX (58.29 -8.41%): Co filed lawsuit against DB Shoe, a California-based retailer, for selling footwear that infringes on the Skechers Go Walk product line.
OI (29.28 -6.59%): Co disclosed it sees Q3 EPS lower than consensus.
12:03 pm BlackBerry and Porsche Design announce the new Porsche Design P'9983 smartphone (BBRY) : The device integrates premium quality materials such as sapphire glass for the camera lens, forged stainless steel for the Porsche Design floating logo and chassis, and a special glass-weave technology for the back door.
12:00 pm Seagate Tech and Baidu (BIDU) sign strategic cooperation agreement in the areas of low-cost online storage, archiving and Big Data analysis (STX) : Co announced it has signed a strategic cooperation agreement with Baidu (BIDU) in the areas of low-cost online storage, archiving and Big Data analysis.
Under the agreement, Baidu will give priority to Seagate products when considering components for all Baidu servers and storage facilities. In return Seagate will align with Baidu as a Strategic Customer and give priority to Baidu when providing enterprise storage products and relevant support, as well as maintain a dedicated engineering team for Baidu.Seagate will supply enterprise capacity and performance products as part of the relationship.
STX also signed a supplier cooperation agreement with Huawei under which both parties agreed to expand cooperation to establish a joint laboratory and collaborate on new products, technology and marketing for cloud storage solutions.
10:01 am Rubicon Tech announces Raja Parvez will step down as CEO and as a member of the Board of Directors, effective immediately (RBCN) : Co announced that Raja Parvez will step down as Chief Executive Officer and as a member of the Board of Directors, effective immediately.
The Board has appointed William Weissman, currently CFO, as interim CEO to ensure a smooth transition and to lead Rubicon's executive team. Chairman Don Aquilano will lead a Board search for a permanent CEO with the assistance of a leading executive search firm.Market participants waited anxiously for most of the day for the FOMC's latest policy directive. That directive was issued at 2:00 p.m. ET and it was regarded more for what it included than what it excluded.
To that end, it included the "considerable time" language that market bulls were hoping to see if Tuesday's rally was any indication. Actually, the directive contained a whole lot of what has been seen in prior directives, so it was fair to label it a dovish directive even though it garnered two dissenting votes from Dallas Fed president Fisher and Philadelphia Fed President Plosser.
The stock market had its typical roller-coaster run after the directive, and when it was all said and done, the major indices closed the day roughly where they were trading just before 2:00 p.m. ET. The S&P 500 information technology sector (+0.2%) moved in a similar fashion, although it managed to outperform the S&P 500 (+0.1%) by a slim margin after underperforming by a slim margin on Tuesday.
Enter Apple (AAPL 101.58, +0.72) whose standing has been the swing factor for the sector the past two days (not that it isn't a swing factor most days with its heavy weighting). On Wednesday Apple perked up on reports of positive reviews for the iPhone 6 and optimism about the robust demand for its new smartphones. It stands to reason, too, that Apple may have been regarded as somewhat of a safety stock in front of the FOMC announcement as well as the Scottish independence vote on Thursday.
Either way, its strength was a bedrock factor for the sector, which was weighed down a bit by losses in Adobe Systems (ADBE 67.30, -3.43) that followed its mixed third quarter report and disappointing revenue guidance for the fourth quarter.
Microsoft (MSFT 46.52, -0.24) was another drag despite reports that the company increased its quarterly dividend by 11% to $0.31. The sticking point for some investors perhaps was the recognition that Microsoft raised its quarterly dividend by 22% at the same time last year.
The majority of the sector traded higher on Wednesday.
The semiconductor stocks were a pocket of relative strength. Intel (INTC 34.98, +0.05) trailed the group, yet it offered a measure of support nonetheless to the Philadelphia Semiconductor Index, which jumped 0.7% and turned positive for the month.
Elsewhere, cloud services provider Rackspace (RAX 32.39, -6.95) got beat up pretty good after the company said it has ended its evaluation of alternatives and that it will not be acquired. The company announced its review in mid-May and its stock price shot up sharply as a result. A lot of the acquisition speculation then was taken out of the stock, which declined 18% in Wednesday's trading.
Gaming software company Activision (ATVI 21.44, -0.77) was another lowlight. Its losses were a bit more perplexing considering the company shared the news on Wednesday that its new franchise Destiny sold-through more than $325 million worldwide in its first five days. ATVI had been on quite a run this year, so it is possible it fell prone to the view that today's success will be tomorrow's tough comparison. Even with Wednesday's loss, ATVI is still up 20% year-to-date.
The tables are turned in both respects for network security company FireEye (FEYE 35.47, +1.83). It gained 5.4% on Wednesday on some optimism about new product announcements. After the close, FireEye said it and Mandiant will deliver the industry's first global security as a service solution. Despite Wednesday's big gain, FEYE is still down 19% year-to-date.
(Disclosure:Briefing.com has a business relationship with Microsoft)
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