By Mark DeCambre, MarketWatch , Chris Matthews
Equities trim heavy early declines
Stocks traded modestly lower Wednesday after the release of
minutes from the Federal Reserve's last policy meeting, but
remained above session lows scored early in the session.
How are benchmarks performing?
The Dow Jones Industrial Average fell more than 300 points in
early trading, before paring those losses and briefly edging into
positive territory. The Dow was down 56 points, or 0.2% to sit at
25,740 in recent action. The S&P 500 lost 6 points, or 0.2%, to
2,804, while the Nasdaq Composite Index shed 33 points, or 0.4%, to
Read:Why a big, 1-day stock-market bounce doesn't mean 'blue
On Tuesday, the Dow jumped 547.87 points, or 2.2%, to 25,798.42.
The S&P 500 gained 59.13 points, or 2.2%, to 2,809.92 with tech
and health care among the strongest performers in a session where
all 11 sectors finished higher. The Nasdaq Composite Index climbed
214.75 points, or 2.9%, to 7,645.49. It was the biggest single-day
advance for all three indexes since March 26.
What's driving the market?
The minutes of the Fed's September meeting, which saw policy
makers deliver a widely expected quarter-point increase, showed
that a majority of policy makers believe interest rates must
continue to rise
until policy becomes restrictive.
Minutes aren't ordinarily a source of volatility, however, the
outsize focus on Treasury rates--notably a rise in the yield on the
10-year Treasury note to a seven-year high last week -- ensured
they were closely read.
Meanwhile, the market continues to closely watch negotiations
between the European Union and Britain as it attempts to exit from
the trade bloc with a trade agreement in hand. The potential for a
clash between Italy and the European Union over Rome's budget plans
is also in the spotlight.
Which data were in focus?
The number of new homes under construction fell 0.6% to a
seasonally-adjusted annual rate of 1.201 million
in September. The rate was 1% below last year's levels. The numbers
nearly matched the consensus forecast of 1.208 million produced by
a MarketWatch survey of economists.
Permits for construction of new homes also fell 5.3% in
September from the month before to a seasonally adjusted annual
rate of 1.241 million. The number represents a 3.7% increase
year-over-year, but still was weaker than average analysts
expectations polled by FactSet for a pace of 1.28 million new
What were analysts saying?
"We had a big day yesterday, and today's open shows that
volatility is not going away," said Jeff Carbone, co-founder of
asset management firm Cornerstone Wealth Group. With interest rates
markedly higher today than even one month ago, investors will
remain cautious, and the early morning downturn is evidence of this
change in sentiment, he said. "But when you look at the
fundamentals of the economy and the market, we expect the market to
ultimately move upward."
Mark Espisito, chief executive of Espisito Securities shared
this optimism. "We still see a strong earnings season and a strong
stock market for the next year or so," he said. "Even when there is
a pullback like this morning, it's met with resistance."
He argued that the reversal of steep early morning losses in the
major indexes is proof that there is "consistent buying interest
when markets move down," because investors are still betting on a
strong economy and strong earnings to power stocks higher.
Which stocks were in focus?
Shares of Netflix Inc. (NFLX) were on the rise a day after the
company reported better-than-expected quarterly results
The stock was up 3.9%
Investors soured on shares of International Business Machines
Corp. (IBM), after the company announced a revenue miss following
the close on Tuesday. Shares were down 6%.
Shares of United Continental Holdings(UAL) are up 6, following
news that executives raised their forecasts for 2018 profits, even
as it missed analysts' third quarter EPS estimates.
Auto parts retailers are having a rough day, with AutoZone, Inc.
(AZO) ranking as the S&P's biggest loser Wednesday, down 7.6%.
Advance Auto Parts, Inc. (AAP) was also down 6.4%.
Tesla(TSLA) stock is down 3.2%, following an SEC filling by the
company saying it plans to issue $20 million in stock that will be
bought by the company's founder, Elon Musk. The stock initially
popped on the news
but reversed course after the market opened. The filing also
announced that a federal court approved a settlement between Tesla,
Musk and the Securities and Exchange Commission that has the
company and its founder each paying $20 million in fines related to
Musk's proposal to take Tesla private.
Home Depot(HD) shares are down 4.2%, on falling housing starts
data and new housing permit numbers that missed expectations.
Shares of companies in the cannabis industry garnered investor
interest on the first day of legal, recreational marijuana use
across Canada. Shares of three of four major, publicly listed
were down in morning trading, though all have recovered some from
Aurora Cannabis (ACB.T)was hit hard after the bell, falling
12.5%, before paring losses to be down 1.2%.
Cronos Group (CRON.T)stock was down 5.8% in morning trading,
while Canopy Growth Corporation(WEED.T) was down 3.9%
Shares in Aphria, Inc. (APH.T), however, rose 2.1% during
How did other markets trade?
Asian stocks ended higher, with Japan's Nikkei jumping 1.3%,
extending Tuesday's rally in the U.S., while European indexes were
trading slightly lower as Italian and British political uncertainty
buffeted stock benchmarks.
Crude-oil prices fell, while gold prices were up 1% as the U.S.
dollar index edged slightly higher early Wednesday.
(END) Dow Jones Newswires
October 17, 2018 14:28 ET (18:28 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Historical Stock Chart
From Jul 2020 to Aug 2020
Historical Stock Chart
From Aug 2019 to Aug 2020