By Chris Matthews and Barbara Kollmeyer, MarketWatch
Investors await outcome of Fed policy meeting
U.S. stocks rose modestly Wednesday morning as investors weighed
another round of corporate earnings, with Apple Inc.'s
better-than-expected results helping put the S&P 500 on track
for a fourth straight record close.
Investors are also awaiting the outcome of a Federal Open Market
Committee meeting and news conference with Federal Reserve Chairman
Jerome Powell.
How are major indexes performing?
The Dow Jones Industrial Average rose 64 points, or 0.2%, to
26,656, while the S&P 500 index climbed 4 points, or 0.1%, to
2,950, surpassing its previous intraday record high of 2,949.52.
Meanwhile, the Nasdaq Composite Index saw a 34-point rise, a gain
of 0.4%, to 8,129.
On Tuesday, the Dow gained around 0.2% to 26,592.91, while the
S&P 500 index gained 2.8 points, or 0.1%, or to close at
2,945.83, well of its Tuesday low at 2,924.21. Meanwhile, the
Nasdaq Composite Index fell 54.09 points, or 0.7%, to finish at
8,107.77, but off a low at 8,050.55.
The S&P 500 edged further into record territory with
Tuesday's action, the Nasdaq pulled back from a record finish on
Monday, while the Dow began the day 0.9% away from its record
closing high, set on Oct. 3.
What's driving the market?
Dow component Apple (AAPL) was getting attention after the
iPhone maker reported another fall in profit and revenue, but beat
expectations for first-quarter performance
(http://www.marketwatch.com/story/apple-stock-gains-after-earnings-outlook-tops-expectations-2019-04-30).
Moreover, Apple signaled that the worst is over for its China
business, and did report momentum in its services businesses, which
stock bulls see as key to the company's growth. Shares were up 6.2%
Wednesday morning.
First Take: Apple is optimistic, and it isn't because of the
iPhone
(http://www.marketwatch.com/story/apple-is-optimistic-and-it-isnt-because-of-the-iphone-2019-04-30)
On the economic front, the Fed will announce the results of its
monetary policy meeting at 2 p.m. Eastern Time, followed by a news
conference with Chairman Powell at 2:30 p.m. Eastern.
Over the past six weeks, Fed officials have emphasized a need
for patience, signaling they want to leave rates on hold until they
are certain about the economic outlook. Many economists expect the
Fed to remain on hold for some time, possibly through the end of
2020, while market participants have wagered on the potential for a
rate cut.
Read:Powell faces tough test Wednesday as market is uneasy with
his recent communication
(http://www.marketwatch.com/story/powell-faces-tough-test-wednesday-as-market-is-uneasy-with-his-recent-communication-2019-04-29)
(http://www.marketwatch.com/story/powell-faces-tough-test-wednesday-as-market-is-uneasy-with-his-recent-communication-2019-04-29)The
Fed is fully expected to remain on hold Wednesday, but Powell's
remarks will be closely watched for clues to policy makers'
thinking.
See:The case for the Fed to keep an interest-rate hike on the
table revolves around financial stability
(http://www.marketwatch.com/story/the-case-for-the-fed-to-keep-an-interest-rate-hike-on-the-table-revolves-around-financial-stability-2019-04-30)
Also read:The Fed could lower an interest-rate target today.
Don't get too excited
(http://www.marketwatch.com/articles/federal-reserve-interest-rate-target-51556589723)
President Donald Trump took to Twitter Tuesday in an apparent
effort to jawbone the Fed
(http://www.marketwatch.com/story/trump-today-president-agrees-to-pursue-infrastructure-with-democrats-as-he-leans-on-fed-to-cut-interest-rates-2019-04-30)
into easing policy, calling on the central bank to cut rates and
reinstitute quantitative easing.
Barron's:Trump wants the Fed to cut interest rates by a full
point. He should be happy it's on hold
(http://www.marketwatch.com/articles/donald-trump-wants-the-fed-to-cut-interest-rates-he-should-be-happy-its-on-hold-51556656393)
Which stocks are in focus?
Shares of CVS Health Corp.(CVS) rallied 5.3% after the pharmacy
and health-care services giant reported first-quarter earnings
(http://www.marketwatch.com/story/cvs-healths-stock-surges-after-profit-revenue-and-same-store-sales-beat-expectations-2019-05-01)
and sales that beat Wall Street expectations, while raising its
outlook for the full-year 2019.
Estée Lauder Cos. Inc. (EL) shares surged 2.6%, after the makeup
manufacturer reported first-quarter sales that beat analyst
expectations, while predicting revenue would grow between 7% and 8%
during the full-year 2019.
Molson Coors Brewing Co. (TAP) fell 6.7%, after the company
reported first-quarter earnings
(http://www.marketwatch.com/story/molson-coors-earnings-fall-short-of-estimates-2019-05-01)
that fell short of forecasts.
Shares of Humana Inc. (HUM) retreated 1.8%, even after the
insurer reported first-quarter earnings and revenue
(http://www.marketwatch.com/story/humana-tops-first-quarter-revenue-and-earnings-expectations-2019-05-01)
Wednesday morning that topped Wall Street expectations, while also
raising its full-year guidance.
Yum! Brands Inc.(YUM)stock fell 2.9% Wednesday morning, after
the Taco Bell parent reported first-quarter results
(http://www.marketwatch.com/story/yum-brands-earnings-beat-expectations-2019-05-01).
Shares of Royal Carbanion Cruises Ltd. (RCL) rose 6.3%
Wednesday, after the cruise operator reported first-quarter
earnings
(http://www.marketwatch.com/story/royal-caribbeans-stock-surges-after-earnings-revenue-beat-expectations-2019-05-01),
revenue and net yields that beat expectations.
Hotel operator Hilton Worldwide Holdings Inc. (HLT) announced
first-quarter earnings growth of 16% Wednesday, well above Wall
Street forecasts. Share rose 7.2%.
Chip group Qualcomm Inc.(QCOM), social-gamer Zynga Inc.(ZNGA),
wearables maker FitBit Inc.(FIT) and mobile payment group Square
Inc.(SQ) will report after the close.
Read:Qualcomm short sellers are out in full force ahead of
earnings
(http://www.marketwatch.com/story/qualcomm-short-sellers-are-out-in-full-force-ahead-of-earnings-2019-05-01)
(http://www.marketwatch.com/story/qualcomm-short-sellers-are-out-in-full-force-ahead-of-earnings-2019-05-01)Check
out:Qualcomm earnings, schmernings: Tell us more about the Apple
settlement
(http://www.marketwatch.com/story/qualcomm-earnings-schmernings-tell-us-more-about-the-apple-settlement-2019-04-29)
What are analysts saying?
"We're getting a lot of mixed signals in terms of macro data,"
Tom Martin senior portfolio manager at Globalt Investments told
MarketWatch, pointing to the surprisingly strong ADP jobs report
and the worse-than expected ISM manufacturing report as the latest
examples of conflicting data that are making it difficult to get a
read on the trajectory of the U.S. economy.
"Corporate earnings season has also been indicative of this
trend," he said. "Apple is your bullish data point on the day for
company news, but even within sectors you have some very good
reports that indicate a decent economy and some very bad reports
that indicate a not very good economy."
"Global stock markets are edging higher ahead of the U.S.
Federal Reserve's rate decision. Despite President Trump's calls
for interest rate cuts, Fed chair Jerome Powell is widely expected
to keep interest rates on hold," said Mihir Kapadia, chief
executive and founder of Sun Global Investments, in emailed
comments. "With the global economy still a source of uncertainty
for investors, many will be reassured by this more dovish
sentiment."
What else is on the economic calendar?
Payroll firm ADP released its estimate of private-sector job
growth in April, showing the U.S. economy added 275,000 new jobs
(http://www.marketwatch.com/story/adp-private-sector-job-growth-surges-by-275000-but-theres-a-caveat-2019-05-01),
well above the 176,000 consensus estimate, according to FactSet.
However, Mark Zandi, Moody's Analytics chief economist and
architect of the ADP report said that the figure "overstates the
case" of job growth and predicted that Friday's official government
job report will show less robust employment growth.
Markit's manufacturing purchasing managers index for April came
in at 52.6, a slight uptick from the near two-year low seen last
month, and above consensus expectations for a reading of 52.4,
according to FactSet data.
The more closely watched Institute for Supply Management
manufacturing index came in at 52.8%, well below consensus
expectations of 54.7%, according to a MarketWatch poll of
economists, and below the March reading of 55.3%.
The Commerce Department said construction spending fell by 0.9%
in March, compared with February, below economists expectations of
a 0.4% decline, per a MarketWatch survey.
How are other markets faring?
Most stock markets in Asia were closed for holidays
(http://www.marketwatch.com/story/australian-stocks-rise-with-most-asian-markets-closed-for-holiday-2019-04-30),
though Australia's S&P/ASX 200 closed up 0.8%, while New
Zealand's NZK-50 fell 0.5%. European stock markets were also
largely closed for May Day celebrations, while The U.K's FTSE 100
was edging lower
(http://www.marketwatch.com/story/sainsburys-leads-london-markets-quietly-higher-2019-05-01).
The price of crude oil was on the decline
(http://www.marketwatch.com/story/us-oil-prices-drop-on-indication-of-domestic-supply-build-global-brent-gains-2019-05-01)
Wednesday, along with gold prices
(http://www.marketwatch.com/story/gold-edges-lower-ahead-of-fed-decision-2019-05-01).
The U.S. dollar was also retreating
(http://www.marketwatch.com/story/dollar-skid-continues-ahead-of-federal-reserve-decision-2019-05-01),
relative to its peers.
(END) Dow Jones Newswires
May 01, 2019 11:38 ET (15:38 GMT)
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