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Market Snapshot

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

Dow 33820.38 -164.55 (-0.48%)
Nasdaq 14051.05 -39.19 (-0.28%)
SP 500 4183.18 -3.54 (-0.08%)
10-yr Note +1/32 1.613
NYSE Adv 1898 Dec 1317 Vol 820.0 mln
Nasdaq Adv 2276 Dec 1794 Vol 4.5 bln

Industry Watch
Strong: Energy, Communication Services
Weak: Information Technology, Health Care

Moving the Market

-- Fed Chair Powell said it's not time to start talking about tapering asset purchases

-- Fed keeps rates and pace of asset purchases unchanged, as expected

-- Dow underperformed amid disappointing earnings reactions in Microsoft (MSFT), Boeing (BA), and Amgen (AMGN)

-- Alphabet (GOOG) crushed EPS estimates

Large-cap indices close slightly lower on Fed day
28-Apr-21 16:20 ET
Dow -164.55 at 33820.38, Nasdaq -39.19 at 14051.05, S&P -3.54 at 4183.18

[BRIEFING.COM] The S&P 500 decreased 0.1% on Wednesday in another tight-ranged session, as the broader market showed little reaction to the Fed's policy decision or earnings news. The Nasdaq Composite (-0.3%) and Dow Jones Industrial Average (-0.5%) also closed lower, while the Russell 2000 (+0.1%) closed slightly higher.

The FOMC did as everyone expected by keeping rates near zero and leaving the pace of asset purchases unchanged by at least $120 billion per month. In his press conference, Fed Chair Powell said it wasn't time to start talking about tapering asset purchases and reiterated it'll take substantial further progress until the Fed's employment and inflation goals are reached, meaning those discussions will have to wait a while longer.

There was some uncertainty if the Fed was going to hint at these tapering discussions, but Mr. Powell made it clear throughout this Q&A session that the Fed was assured with its current policy stance. Mr. Powell also downplayed inflation risks and acknowledged some things in capital markets are frothy.

The initial reaction to the tapering comment was modest: a 15-point gain in the S&P 500 to the 4200 level (record high), which was consequently met with selling pressure. Overall, the index moves were tame, respecting the recent consolidation trend in the market.

The communication services (+1.2%) and energy (+3.4%) sectors saw notable strength today, keying off their own catalysts in Alphabet's (GOOG 2379.91, +72.79, +3.2%) blowout earnings report and a bullish call on oil ($63.86, +0.91, +1.5%) out of Goldman Sachs. The firm said it expects crude prices to reach $80 per barrel over the next six months due to strong demand.

Conversely, the information technology sector (-1.0%) was the weakest link with a 1% decline, predominately due to a disappointing earnings reaction in Microsoft (MSFT 254.56, -7.41, -2.8%). Semiconductor stocks also lagged, particularly Texas Instruments (TXN 181.82, -8.39, -4.4%) despite reporting positive earnings results.

Amgen (AMGN 236.71, -18.42, -7.2%) and Boeing (BA 235.46, -7.01, -2.9%) joined Microsoft as earnings laggards in the Dow. Visa (V 233.45, +3.54, +1.5%), however, provided offsetting support in the tech sector and Dow following its earnings report.

U.S. Treasury yields declined from session highs, settling little changed, following the release of the FOMC statement and Fed Chair Powell's affirmation of the Fed's view that inflation will be transitory. The 10-yr yield was unchanged at 1.62%, and the 2-yr yield was unchanged at 0.17%. The U.S. Dollar Index decreased 0.4% to 90.58.

Reviewing Wednesday's economic data:

The Advance report for International Trade in Goods for March showed a deficit of $90.6 billion versus $86.7 billion in February. The Advance report for Retail Inventories for March decreased 1.4%, while the Advance report for Wholesale Inventories for March increased 1.4%.
The MBA Mortgage Applications Index decreased 2.5% following an 8.6% increase in the prior week.

Looking ahead, investors will receive the advance estimate for Q1 GDP, the weekly Initial and Continuing Claims report, and Pending Home Sales for March on Thursday.

Russell 2000 +16.7% YTD
S&P 500 +11.4% YTD
Dow Jones Industrial Average +10.5% YTD
Nasdaq Composite +9.0% YTD

Resistance at the 4200 level
28-Apr-21 15:25 ET
Dow -114.47 at 33870.46, Nasdaq -9.51 at 14080.73, S&P +3.16 at 4189.88

[BRIEFING.COM] The S&P 500 is up 0.1% after finding resistance at the 4200 level, which it touched for the first time ever. Fed Chair Powell has just concluded his press conference.

One last look at the S&P 500 sectors shows energy (+3.4%) and communication services (+1.7%) still firmly in the lead, while the information technology sector (-0.7%) lags with a 0.7% decline.

WTI crude futures settled higher by 1.5%, or $0.91, to $63.86/bbl. On a related note, Goldman Sachs said it expects crude prices to reach $80 per barrel over the next six months due to strong demand.