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S&P 500 up 0.1%; Dow up 0.4%
Stocks pare gains as Powell speaks at news conference
Exchange-traded funds that track and financial and banking sectors rose sharply on Wednesday, after the Federal Reserve raised interest rates, as had been widely expected. The Financial Select Sector SPDR ETF rose 1.3% while the SPDR S&P Bank ETF was up 1.2%. The SPDR S&P Regional Banking ETF gained 0.9%. The Fed stuck to its prior forecast of three rate hikes in 2018, though it projected another three in 2019, rather than the two it previous indicated. In contrast to the broader equity market, bank stocks tend to benefit from environments with higher interest rates, as rates boost their net interest margins, or the difference between the interest they earn on the loans they make and the interest they pay out. Low rates can depress their net interest margins, which can lead to lower earnings. Also boosting the sector was the steeping yield curve, which is also seen as providing a tailwind for bank profits. The yield for the U.S. 10-year Treasury note was 2.92% while it was 2.34% for the two year note. The Dow Jones Industrial Average rose 0.6% while the S&P 500 was up 0.4% and the Nasdaq Composite Index rose 0.2%. Among individual stocks, Goldman Sachs rose 0.9% while JPMorgan Chase & Co. was up 1.5%.
The Cboe Volatility index fell on Wednesday, after the Federal Reserve raised interest rates at its March meeting and indicated it would stick with just two additional hikes this year. The VIX fell 6.4%, or 1.22 points, to 16.98, trading below its long-term average of 20. The U.S. central bank raised a key short-term interest rate, as had been widely expected, and it stuck to its prior forecast of three rate hikes in 2018, deciding for now to wait until next year to take a more aggressive approach. Investors have recently been concerned that the Fed might raise rates four times this year; higher-rate environments tend to make stocks less attractive. The VIX, which reflects bullish and bearish S&P 500 options wagers 30 days out, had been trading slightly lower throughout the session, although it added to its decline after the announcement. The Dow Jones Industrial Average rose 0.5% after the announcement while the S&P 500 rose 0.4% and the Nasdaq Composite Index was up 0.3%.
U.S. stocks held on to modest gains Wednesday afternoon after the Federal Reserve raised interest rates to a range of 1.5% to 1.75%, as expected, in an unanimous decision. In its statement, the Fed indicated that there will be only three rate hikes this year. However, it said it will likely increase rates three times in 2019 rather than the projected two as the economy is expected to grow even faster in the next two years than previously estimated. The S&P 500 rose 12 points, or 0.5%, to 2,729. The Dow climbed 162 points, or 0.7%, to 24,889 while the Nasdaq Composite Index gained 27 points, or 0.4%, to 7,392.
Shares of Home Depot Inc. edged up 0.3% in afternoon trade Wednesday, after Morgan Stanley said the recent weakness has created a "compelling entry point" for investors. The stock has tumbled 13.7% since closing at a record $207.23 on Jan. 26, while the SPDR S&P Homebuilders ETF has lost 10.4% and the Dow Jones Industrial Average has declined 6.7%. Morgan Stanley analyst Simeon Gutman reiterated his overweight rating and $210 stock price target, saying he left a recent meeting with management "reassured" about housing market drivers and underlying demand over the next 12 months. "The market is worried about the durability of home improvement demand in the face of rising interest and mortgage rates," Gutman wrote in a note to clients. "Our meetings reinforced several strengths of the story: a favorable macro backdrop, an ability to take market share through differentiation, investing for the future, and organizational cohesion that increases productivity and efficiency while minimizing execution risk."
A stock market selloff deepened on Monday after, led by high-flying technology stocks.
Major stateside stock benchmarks are pacing for a better annual performance than much of the rest of the world, despite a volatile few weeks.
It's quite likely the new chair will see more market volatility during his term than did his predecessor. Janet Yellen's time at the helm was marked by mostly serene markets.
Money is flowing back into stocks, a sign that investors believe the market will keep climbing after the recent selloff.
Stop trying to make sense of the stock market, Jason Zweig says.
Here is a selection of factoids about the market's big decline on Monday.
The Dow Jones Industrial Average briefly fell more than 5% from its record high on Monday morning, a pullback that has historically served as an entry-point for bargain-hunting investors.
The stock market's long stretch of calm was interrupted this week.
President Donald Trump on Friday suggested that his election loss would have sparked a plunge in the stock market that's only ever happened eight times.
The year is just 15 trading sessions old and already the stock market has put in almost a full year's worth of gains.
Barring a massive shock before the closing bell on Monday, the S&P 500 will have had 395 trading days without a decline of 5% or more from a record high
Investors are pouring into the stock market as major indexes extend their monstrous rise.
The Nasdaq Composite Index closed at an inflation-adjusted record for the first time in nearly two decades, passing one of the few elusive milestones during this long bull market.
Boeing Co. isn't the biggest firm in the Dow Jones Industrial Average, a blue chip index that also includes the largest U.S.-listed company by market value, Apple Inc.
The stock market had a blowout start to the year. In just four days, the S&P 500 rose 2.6%, its best week since the end of 2016. That's a good omen for the rest of 2018.
The Dow Jones Industrial Average can thank Boeing Co. for its record-breaking run.
No company is more tied to the Dow Jones Industrial Average than General Electric Co. But the Boston-based conglomerate wasn't much help in the blue-chip index's run to its latest milestone.
After a year in which the S&P 500 rose 19%, Wall Street expectations are for a more modest rise in 2018.
Just because stocks had a banner year in 2017 doesn't mean they have to have a bad year in 2018.
Byron Wien, the Blackstone Group L.P. vice chairman who's been making a widely-watched list of year-ahead predictions for more than three decades, sees some wild market moves in store for 2018.
GMO Commentary - ESG: Improving Your Risk-Adjusted Returns in Emerging Markets
When stocks sell-off, a whole bunch of new financial terms start popping up that you may not be familiar with. Here's our cheat sheet to help you out.
Research Affiliates - Performance Measurement: How to Do It If We Must
Royce Funds Commentary: Why Earnings Matter More Than Volatility
Prem Watsa's Fairfax Financial 2017 Shareholder Letter
Jim Grant: The Great Bear Market Has Started
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S&P 500 Index | |||
Russell 2000 Index | |||
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Dow Jones Transportation Average | |||
Dow Jones Utility Average Index | |||
Dow Jones U.S. Total Stock Market Index | |||
NASDAQ 100 Index (NASDAQ Calculation) | |||
S&P 400 Mid Cap Index | |||
NYSE Composite Index | |||
Barron's 400 Index | |||
CBOE Volatility Index | |||
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The Asia Dow Index USD | |||
S&P/ASX 200 Benchmark Index | |||
Shanghai Composite Index | |||
Hang Seng Index | |||
S&P BSE Sensex Index | |||
NIKKEI 225 Index | |||
FTSE Straits Times Index | |||
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STOXX Europe 50 Index EUR | |||
STOXX Europe 600 Index EUR | |||
CAC 40 Index | |||
DAX | |||
IBEX 35 Index | |||
FTSE 100 Index GBP | |||
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BOVESPA Index | |||
S&P/TSX Composite Index | |||
IPC Indice de Precios Y Cotizaciones |
Company | Last | Chg | Chg % |
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Chevron Corp. | |||
DowDuPont Inc. | |||
General Electric Co. | |||
Exxon Mobil Corp. | |||
Caterpillar Inc. | |||
JPMorgan Chase & Co. | |||
3M Co. | |||
Walt Disney Co. | |||
American Express Co. | |||
Walmart Inc. | |||
International Business Machines Corp. | |||
Goldman Sachs Group Inc. | |||
Home Depot Inc. | |||
Boeing Co. | |||
United Technologies Corp. | |||
Travelers Cos. Inc. | |||
Pfizer Inc. | |||
Johnson & Johnson | |||
Merck & Co. Inc. | |||
Cisco Systems Inc. | |||
Intel Corp. | |||
McDonald's Corp. | |||
Nike Inc. Cl B | |||
Coca-Cola Co. | |||
Microsoft Corp. | |||
Verizon Communications Inc. | |||
UnitedHealth Group Inc. | |||
VISA Inc. Cl A | |||
Procter & Gamble Co. | |||
Apple Inc. |