Before The Bell - The choppiness on Wall Street is continuing. On point, after back-to-back losses in the stock market to end last week, equities began the current five-day span to the upside on Monday. However, things deteriorated again on Tuesday when the Dow Jones Industrial Average fell by 205 points on weak economic numbers on the consumer confidence front. Encouragingly though, the bulls came back to the battle yesterday, buoyed by expectations that the Federal Reserve would have reassuring words for investors when it concluded its FOMC meeting.
As to specifics, the stock market was once more led higher by the technology names, such as Apple Inc. (AAPL), as that issue moved up by better than five points in early action. Indeed, on the strength in technology, the NASDAQ was ahead by 120 points as we hit the two-hour mark of trading. The Dow, meantime, was up more grudgingly, as it was ahead by some 80 points. As noted, much of the gain could be attributed to speculation that the Fed would signal continued monetary support and stimulus.
As to individual issues, shares of semiconductor maker Advanced Micro Devices (AMD) jumped almost $10 in late-morning action thanks to a strong forecast. Starbucks (SBUX) stock also rose amid positive July sales. Returning to the Fed, the central bank was not expected to make any major policy adjustments at its meeting, but was expected to remain supportive. In other news, the two parties in Washington were still $2 trillion apart in their respective coronavirus aid packages.
Meanwhile, the stock market stayed up as 2:00 PM (EDT) arrived and the Federal Reserve concluded its latest FOMC meeting with no change in interest rates. Moreover, the led bank indicated that U.S. economic activity and employment have picked up somewhat but have remained well below their levels at the beginning of 2020. As this meant the Fed would continue to be supportive until things improved further, the stock market firmed even more after the FOMC concluded its get together.
The market then would firm further into the close with the major composites ending the trading day fairly close to their session highs. All told, the Dow would add 160 points; the S&P 500 would climb a strong 40 points; and the NASDAQ, boosted by gains in some large tech stock, would finish ahead by an impressive 141 points. Then, after some mixed to somewhat lower movement in the futures after the close of trading, the indexes seem poised to start the new session to the new session this morning to the downside on fresh earnings concerns. – Harvey S. Katz, CFA