U.S. stocks struggle near Record; Treasuries rally
U.S. stocks struggled Wednesday near record highs on speculation that a recent rally outpaced the risks to global economic growth. Bonds climbed.
The S&P 500 Index wiped out an early advance after Federal Reserve Chairman Jerome Powell said that uncertainties about the outlook remain - including those around trade policy and the coronavirus. Treasuries extended gains after he noted that the committee revised its language about inflation to clarify that policy makers aren't comfortable with it below 2%.
In a highly anticipated decision, the Fed kept its key interest rate unchanged and continued to signal policy would stay on hold for the time being. As the earnings season continued to roll in Apple's strong results sent the iPhone maker to a record while General Electric's outlook topped Wall Street's estimates. Boeing rallied on news that the planemaker burned less cash than expected.
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Some other corporate highlights:
- McDonald's sales in its home market beat expectations.
- Mastercard, Dow Inc. and T. Rowe Price reported better-than-estimated results.
- AT&T topped earnings estimates as cost cuts helped offset steep TV-subscriber losses and higher spending on its media business.
- EBay, Advanced Micro Devices and Xilinx gave lackluster guidance.
Elsewhere, oil fell after a government report showed the biggest jump in U.S. crude stockpiles since November. The European Parliament approved Prime Minister Boris Johnson's Brexit deal, clearing the way for the U.K. to leave the EU on Jan. 31 with an agreement that, for the time being, will avoid a chaotic rupture.
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Here are some events to watch out for this week:
- Samsung Electronics, International Paper, Unilever and Shell report on Thursday, followed by South Korean chip maker SK Hynix, Chevron, Caterpillar and Exxon Mobil all on Friday.
- The Bank of England meeting on Thursday is highly anticipated after a series of dovish comments raised speculation policy makers could lower interest rates.
- The U.S. reports fourth-quarter GDP on Thursday.
-The U.K. is scheduled to leave the European Union on Friday.
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These are some of the main moves in markets:
Stocks
- The S&P 500 fell 0.1% as of 4 p.m. Eastern time. It closed at 3273.40, down 0.09 %. Nasdaq closed at 9275.16, up 0.06 % and Dow Jones Industrial Average closed at 28734.45, up 0.04 %.
- The Stoxx Europe 600 Index climbed 0.4%.
- The MSCI Emerging Market Index dipped 0.5%.
Currencies
- The Bloomberg Dollar Spot Index was little changed.
- The euro dipped 0.1% to $1.1006.
- The Japanese yen strengthened 0.1% to 109.06 per dollar.
Bonds
- The yield on 10-year Treasuries dipped seven basis points, to 1.59%.
- Germany's 10-year yield fell four basis points, to -0.38%.
- Britain's 10-year yield decreased four basis points, to 0.516%.
Commodities
- The Bloomberg Commodity Index dipped 0.6%.
- West Texas Intermediate crude dipped 0.6% to $53.15 a barrel.
- Gold rose 0.4% to $1,582 an ounce.
