U.S. Stocks Open Higher Ahead of Fed Policy Decision
January 29 2020 - 10:01AM
Dow Jones News
By Avantika Chilkoti
U.S. share benchmarks ticked up Wednesday as investors focused
on blue-chip companies' earnings results while awaiting fresh
insights on the broader economy from the Federal Reserve.
The Dow Jones Industrial Average edged up 0.5% in early New York
trading, while the S&P 500 added 0.4% and the tech-heavy Nasdaq
Composite Index advanced 0.5%.
Earlier, the Stoxx Europe 600 index gained 0.5%, while in Hong
Kong , where markets opened for trading for the first time since
the Lunar New Year holidays began, the benchmark Hang Seng Index
closed down 2.8% as investors weighed the impact of the
fast-spreading coronavirus outbreak in China.
Ahead of the opening bell in New York, shares in Apple gained
1.9%. The technology giant late on Tuesday reported record revenue
and a return to profit growth in the latest quarter with strong
sales of its flagship smartphone as well as apps and AirPods
wireless earbuds.
General Electric rallied over 7% in premarket trading after the
conglomerate gave an upbeat outlook for 2020, and reported strong
cash flow in the fourth quarter for industrial operations.
L Brands jumped over 13% after The Wall Street Journal reported
that Chief Executive Officer Leslie Wexner, the billionaire behind
Victoria's Secret, is exploring strategic alternatives for the
lingerie brand, which could result in a full or partial sale of
that division.
Advanced Micro Devices retreated 5.3% after the chip maker's
guidance for first-quarter revenue disappointed Wall Street.
Smaller rival Xilinx fell 8.3% after the chip maker cut sales
projections for the year and said it would reduce its workforce by
7%.
Ebay dropped over 4% in offhours trading after the e-commerce
firm issued lower-than-expected guidance for first-quarter
revenue.
Later in the day, U.S. companies including Microsoft, Facebook
and Tesla are scheduled to report earnings for the latest
quarter.
While the Fed is widely expected to hold interest rates stable
when it concludes its latest round of policy meetings this evening,
investors are likely to be watching for fresh cues on how the U.S.
central bank controls short-term rates. Policy makers will be
looking to unwind a program that began last year when the Fed
flooded markets with cash to avoid fresh spikes in overnight
lending rates. Chairman Jerome Powell's comments at a press
briefing may also provide hints of what lies ahead for the world's
largest economy.
"There is not going to be any fireworks there," said Richard
McGuire, head of rates strategy at Rabobank. "He's likely to
reiterate his previous stance, which is that the current policy is
appropriate."
In Europe, corporate earnings triggered some of the most
significant moves in equities. Banco Santander rose 4.4% after the
Spanish bank's fourth-quarter profit beat expectations and its core
capital ratio climbed. Royal KPN lost 6% in Amsterdam after the
Dutch telecommunications company warned that its consumer segment
is under pressure from competitors.
In Asia, where markets have been roiled by the rapid spread of
the coronavirus originating in central China, the death toll
climbed to at least 132 and confirmed infections rose to about
6,000 people. Trading in mainland China is scheduled to resume next
week after authorities decided to delay the reopening of
exchanges.
--Steven Russolillo contributed to the article.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
January 29, 2020 09:46 ET (14:46 GMT)
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