Market Snapshot
briefing.com
| Dow | 34168.09 | -129.64 | (-0.38%) | | Nasdaq | 13542.12 | +2.82 | (0.02%) | | SP 500 | 4349.93 | -6.52 | (-0.15%) | | 10-yr Note | -1/32 | 1.785 |
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| | NYSE | Adv 1014 | Dec 2253 | Vol 1.2 bln | | Nasdaq | Adv 1241 | Dec 2857 | Vol 5.7 bln |
Industry Watch
| Strong: Information Technology, Consumer Discretionary, Communication Services |
| | Weak: Consumer Staples, Utilities |
Moving the Market
-- Market turns negative during Fed Chair Powell's post-FOMC press conference (leaves market with more questions than answers)
-- Fed keeps rates near zero as expected; says asset purchases will end in early March
-- Microsoft (MSFT) jumps on pleasing earnings news and guidance
-- Technical resistance at the S&P 500's 200-day moving average (4433)
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Stocks fumble gains during Powell's post-FOMC speech
26-Jan-22 16:20 ET
Dow -129.64 at 34168.09, Nasdaq +2.82 at 13542.12, S&P -6.52 at 4349.93
[BRIEFING.COM] The S&P 500 declined 0.2% on Wednesday, fading a 2.2% intraday gain during Fed Chair Powell's post-FOMC press conference, which was construed as hawkish-sounding. The Dow Jones Industrial Average (-0.4%) and Russell 2000 (-1.4%) also closed lower, while the Nasdaq Composite (+0.02%) eked out a gain.
Nine of the 11 S&P 500 sectors closed in negative territory, including the real estate (-1.7%) and materials (-1.0%) sectors with losses of at least 1.0%. The information technology (+0.7%) and financials (+0.3%) sectors, however, provided offsetting support with modest gains.
The stock market opened with rebound-minded intentions after Microsoft (MSFT 296.71, +8.22, +2.9%) headlined a round of better-than-expected earnings reports. It looked promising, as 11 S&P 500 sectors traded in positive territory, although the S&P 500 did see technical resistance at its 200-day moving average (4433).
Nevertheless, the market held firm in its rebound pursuits and even pushed toward session highs immediately after the FOMC published its policy statement at 2:00 p.m. ET. There wasn't anything too surprising in the statement.
Briefly, the FOMC left the target range for the fed funds rate unchanged at 0.00-0.25%, as expected, and said it plans to end asset purchases in early March. In addition, the central bank noted that it would soon be appropriate to begin hiking rates -- mostly likely at the next policy meeting in mid-March.
Again, the S&P 500 couldn't hold its 200-day moving average heading into Fed Chair Powell's press conference. Selling really intensified as the Fed Chair spoke on the need to steadily roll back policy support, citing high inflation risks and the underlying strength of the economy.
The market was anticipating this talk from Mr. Powell, but there were some misgivings about his inability to elucidate on the precise paths of rates or the balance sheet. The Fed Chair explained that the Fed is just beginning these discussions and that it will continue to assess incoming data, allowing the central bank some flexibility.
In some respects, investors were left with more questions than answers. Based on Fed Chair Powell's concerns about inflation, however, both the stock and bond markets took a hawkish interpretation of the press conference.
The 2-yr Treasury note yield, which tracks expectations for the fed funds rate, rose six basis points to 1.08% (touched 1.15% post-settlement). The 10-yr yield rose seven basis points to 1.85%. The U.S. Dollar Index rose 0.6% to 96.48. WTI crude futures rose 2.0%, or $1.73, to $87.36/bbl.
Separately, AT&T (T 24.25, -2.23, -8.4%) and Boeing (BA 194.27, -9.83, -4.8%) were weak all session following their earnings reports. AT&T issued downside FY22 guidance while Boeing missed top and bottom-line estimates.
Reviewing Wednesday's economic data:
- New home sales increased 11.9% month-over-month in December to a seasonally adjusted annual rate of 811,000 units (Briefing.com consensus 765,000) from a downwardly revised 725,000 (from 744,000) in November. On a year-over-year basis, new home sales were down 14.0%.
- The key takeaway from the report is the deceleration seen in sales of higher-priced homes (over $400,000), which suggests prospective buyers could be starting to show some price resistance (i.e., fear of buying at near-term top) as this slowdown occurred before the big jump in rates, and stock market sell-off, in January.
- The Advance report for International Trade in Goods for December showed a deficit of $101.0 billion, versus a revised $98.0 billion (from $97.8 billion) in November. The Advance report for Retail Inventories for December rose 4.4%, while the Advance report for Wholesale Inventories for December rose 2.1%.
- The weekly MBA Mortgage Applications Index fell 7.1% following a 2.3% increase in the prior week.
Looking ahead, investors will receive the advance estimate for Q4 GDP, the weekly Initial and Continuing Claims report, Durable Goods Orders for December, and Pending Home Sales for December on Thursday.
- Dow Jones Industrial Average -6.0% YTD
- S&P 500 -8.7% YTD
- Russell 2000 -12.1% YTD
- Nasdaq Composite -13.4% YTD
Stocks flounder heading into the close
26-Jan-22 15:30 ET
Dow -263.46 at 34034.27, Nasdaq -7.21 at 13532.09, S&P -18.64 at 4337.81
[BRIEFING.COM] The S&P 500 is down 0.4% at the conclusion of the Fed Chair's press conference.
One last look at the sectors shows ten of the 11 S&P 500 sectors trading lower, led by the real estate (-1.8%), materials (-1.3%), and utilities (-1.2%) sectors. The information technology sector (+0.9%) is the only sector still trading higher.
WTI crude futures settled higher by 2.0%, or $1.72, to $87.36/bbl. |
