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Stock market closes flat; Apple gains, Fed keeps rates unchanged
29-Jan-20 16:25 ET
Dow +11.60 at 28734.36, Nasdaq +5.48 at 9275.18, S&P -2.84 at 3273.40

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The S&P 500 stumbled into the close on Wednesday, losing 0.1% in a session highlighted by Apple's (AAPL 324.34, +6.65, +2.1%) strong earnings report and the Fed's unchanged policy decision. The Dow Jones Industrial Average (+0.04%) and Nasdaq Composite (+0.1%) eked out gains, while the Russell 2000 (-0.6%) underperformed amid weakness in the energy stocks.

It was an eventful session that could be broken down into halves. The first half was guided by Apple reporting record revenue results and by the earnings-driven gains in Boeing (BA 322.02, +5.46, +1.7%), General Electric (GE 12.94, +1.21, +10.3%), Dow Inc (DOW 49.67, +2.51, +5.3%), and McDonald's (MCD 214.44, +4.05, +1.9%).

The second half, which saw the market begin to pare gains, focused on the Fed. The central bank left the target for the fed funds rate unchanged at 1.50-1.75% and extended repurchase operations to April from January. Fed Chair Powell reiterated that monetary policy is appropriate and will remain so until something changes to alter the macroeconomic outlook.

Aside from the repo extension, there were few surprises from the Fed, which may have contributed to the lack of enthusiasm that followed. The S&P 500 energy (-1.1%), real estate (-0.6%), and communication services (-0.4%) sectors lagged, with the latter pressured by lackluster earnings results from AT&T (T 37.05, -1.53, -4.0%).

The industrials sector (+0.6%) was today's leader, thanks to gains in Boeing, General Electric, and the transport stocks. The transportation space drew support from Norfolk Southern (NSC 214.83, +10.07, +4.9%) after it beat earnings estimates.

The Philadelphia Semiconductor Index, meanwhile, pulled back 1.8% after AMD (AMD 47.51, -3.02, -6.0%) and Xilinx (XLNX 88.06, -10.55, -10.7%) issued disappointing revenue guidance.

Separately, the coronavirus was mentioned by both Fed Chair Powell and Starbucks (SBUX 86.72, -1.88, -2.1%), which will temporarily close half of its stores in China amid the outbreak. Mr. Powell said the Fed is closely monitoring the situation but said it's still too early to assess its impact on global economies.

Demand for Treasuries steadily increased after the Fed's policy directive. The 2-yr yield declined four basis points to 1.42%, and the 10-yr yield declined five basis points to 1.59%. The U.S. Dollar Index increased 0.1% to 98.11. WTI crude declined 0.1% to $53.36/bbl.

Reviewing Wednesday's economic data:

Pending Home Sales unexpectedly fell 4.9% in December (Briefing.com consensus +1.0%). Today's reading follows an unrevised 1.2% increase in November.
The Advance report for International Trade in Goods for December showed a deficit of $68.3 billion versus $63.2 billion in November. Meanwhile, the Advance report for Retail Inventories for December was unchanged, and the Advance report for Wholesale Inventories for December declined 0.1%.
The weekly MBA Mortgage Applications Index rose 7.2% following a 1.2% decline in the prior week.

Looking ahead, investors will receive the advance estimate for Q4 GDP and the weekly Initial and Continuing Claims report on Thursday.

Nasdaq Composite +3.4% YTD
S&P 500 +1.3% YTD
Dow Jones Industrial Average +0.7% YTD
Russell 2000 -1.2% YTD

Market Snapshot
Dow 28734.36 +11.60 (0.04%)
Nasdaq 9275.18 +5.48 (0.06%)
SP 500 3273.40 -2.84 (-0.09%)
10-yr Note +28/32 1.588
NYSE Adv 1433 Dec 1429 Vol 826.2 mln
Nasdaq Adv 1244 Dec 1935 Vol 2.2 bln

Industry Watch
Strong: Industrials, Materials, Utilities
Weak: Real Estate, Communication Services, Energy

Moving the Market

-- Apple (AAPL) reports record revenue, issues upside guidance

-- Fed left rates unchanged as expected and extended repo operations to April from January

-- Strength in the industrials sector thanks to General Electric (GE), Boeing (BA), and the transport stocks

-- Relative weakness in the semiconductor space amid disappointing revenue guidance from AMD (AMD) and Xilinx (XLNX)

WTI crude closes little changed
29-Jan-20 15:30 ET
Dow +90.72 at 28813.48, Nasdaq +30.11 at 9299.81, S&P +5.20 at 3281.44

[BRIEFING.COM] The S&P 500 has pared gains and is now up 0.2% on no specific catalyst. Fed Chair Powell's press conference is now over.

One last look inside the S&P 500 sectors shows the industrials (+0.8%) and information technology (+0.6%) sectors outperforming the broader market, while the energy (-0.9%) and real estate (-0.6%) sectors underperform.

WTI crude settled down $0.04 (-0.1%) to $53.36/bbl.