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U.S. Stocks Close On Mixed Note

wallstreet oct10 28jul21 lt

U.S. stocks ended mixed on Wednesday after a somewhat volatile session as investors reacted to a slew of corporate earnings updates, and the Federal Reserve's monetary policy statement.

Technology stocks advanced, riding on strong results from Apple Inc, Alphabet and Microsoft, while the components of the Dow and the S&P 500 failed to find any significant support.

The tech-laden Nasdaq composite index surged higher and settled at 14,762.58, gaining 102.01 points or 0.7 percent. The Dow ended down by 127.59 points or 0.36 percent at 34,930.93, while the S&P 500 edged down 0.82 points or 0.02 percent to 4,400.64.

The Federal Open Market Committee, which concluded its two-day monetary policy meeting Wednesday afternoon, left the target range for its federal funds rate unchanged at 0 to 0.25 percent as expected, and said it will continue with its $120 billion-a-month bond-buying program.

The bank, which said the economy is strengthening despite concerns over the spread of the coronavirus, added that risks to the economic outlook remain.

"The sectors most adversely affected by the pandemic have shown improvement but have not fully recovered" noted the central bank's post-meeting statement. "Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses."

Noting that there has been progress towards the central bank's goals on employment and inflation, the bank's statement says changes to policy with regard to monthly bond purchases could be on the way.

The Fed said the open market committee will continue to assess progress in coming meetings.

In the press conference that followed the monetary policy meeting, Powell said there was "more ground to make up" in the labor market to meet substantial further progress threshold to taper bond purchases.

Shares of Alphabet Inc. climbed more than 3 percent after the company reported a sharp jump in earnings in the second quarter thanks to a near 70 percent increase in advertising revenue.

Microsoft shares settled roughly flat despite the company reporting stronger-than-expected second-quarter results, while Apple Inc. ended more than a percent down as warning about a global chip shortage outweighed better than expected quarterly results.

Facebook, Inc gained 1.5 percent after reporting a profit of $10.39 billion or $3.61 per share for the second quarter, compared with $5.18 billion or $1.80 per share in the year-ago quarter.

Boeing Company shares climbed more than 4 percent on strong results. The company reported net earnings of $587 million or $1.00 per share compared to a loss of $2.38 billion or $4.20 per share in the prior year.

Pfizer Inc shares surged up 4.2 percent after the company raised its outlook for fiscal 2021 earnings and revenues.

3M, McDonalds, Travelers Companies, American Express, Visa and Procter & Gamble were among the notable losers.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region ended broadly lower on Wednesday amid worries that Beijing's regulation of its tech firms and online education industries may spread to other industries. However, upbeat earnings updates from U.S. megacap technology companies Google, Microsoft and Apple helped limit markets' decline.

European stocks closed higher on Wednesday, rebounding after two successive days of losses, as some upbeat earnings updates from top name companies in the region lifted sentiment.

Strong results from a few leading companies in the U.S., and a bit of bargain hunting contributed as well to the uptick in the European markets.

Looking Ahead

Data on jobless claims for the week ended July 24th, second quarter GDP, and a report on personal consumption expenditure are due Thursday morning.

On the earnings front, Amazon.com. Inc., Mastercard, Comcast, Merck & Co., T-Mobile and Gilead Sciences are among the companies scheduled to report their quarterly results on Thursday.

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