U.S. Equities Little Changed After Fed as Banks Rise, Bonds Drop

U.S. stocks ended little changed Wednesday after Federal Reserve officials held benchmark interest rates steady and continued to assert strength in the economy. Apple shares pared earlier losses after the company reported iPhone sales that missed analysts’ estimates.

The S&P 500 lost 0.1 percent at 4 p.m. to 2,388 in New York. The benchmark rose 0.1% on Tuesday as investors assessed corporate earnings. The Dow Jones Industrial Average was little changed at 20,957 on Wednesday.

  • Financial (+0.6%) and energy (+0.3%) stocks were the biggest gainers on day; financial shares reversed earlier drop of as much as 0.5%
  • Real estate, materials and telecom shares down at least 0.6%
  • Bonds decline, with 10-year U.S. Treasury yield up 4 bps
  • Volume in S&P 500 16% above 30-day average
    • Advanced Micro Devices trading 150% above 30-day average for 7% of S&P 500 volume
    • Akamai Technologies, Delphi Automotive, Verisk Analytics and Molson Coors and Automatic Data Processing all trading with volume at least 5x 30-day average
  • VIX up to 10.6
    • Volatility movers: Kimco Realty, Sempra Energy, Host Hotels & Resorts, Hologic Inc. and Ball Corp have the highest put/call volume ratios in the S&P 500
  • POLITICS:
    • President Donald Trump hosted Palestinian Authority leader Mahmoud Abbas at the White House on Wednesday as he weighed how to approach the Middle East
    • Russian President Vladimir Putin continued his diplomatic push for a plan to establish safe zones in Syria backed by peacekeepers as he began talks with Turkish leader Recep Tayyip Erdogan in the Black Sea resort of Sochi on Wednesday
  • ECONOMY:
    • Expectations for an interest rate hike in June jumped to more than 95%, according Fed funds futures trading, as Fed officials said economic growth wouldn’t derail the committee’s plan to raise rates twice more this year
    • Apple sold 50.8 million iPhones in the quarter ended April 1, down from 51.2 million units in the same period a year earlier and less than the 51.4 million predicted in a Bloomberg survey of analysts
    • About two-thirds into the U.S. earnings season, 74% of companies beat EPS estimates, versus 69% a year ago, according to data compiled by Bloomberg. In absolute terms, EPS are up 14% year over year, set to be the strongest quarterly profit growth since 2011
    • Market’s reaction to the robust earnings season has been muted so far, and asymmetric to the downside, JPMorgan equity strategists Emmanuel Cau and Mislav Matejka wrote in a note
    • After-market Wednesday: Pioneer Natural Resources Co (PXD), Lincoln National Corp (LNC), CenturyLink Inc (CTL), Concho Resources Inc (CXO), Prudential Financial Inc (PRU), CF Industries Holdings Inc (CF), Federal Realty Investment Trust (FRT), Qorvo Inc (QRVO), Facebook Inc (FB), Murphy Oil Corp (MUR), Albemarle Corp (ALB), MetLife Inc (MET), Williams Cos Inc/The (WMB), Kraft Heinz Co/The (KHC), American International Group Inc (AIG), Transocean Ltd (RIG), Alliant Energy Corp (LNT), American Water Works Co Inc (AWK), Level 3 Communications Inc (LVLT)
    • Pre-market Thursday: Ball Corp (BLL), Fluor Corp (FLR), Scripps Networks Interactive Inc (SNI), Global Payments Inc (GPN), PPL Corp (PPL), Dominion Resources Inc/VA (D), Regeneron Pharmaceuticals Inc (REGN), Willis Towers Watson PLC (WLTW), Eversource Energy (ES), Quanta Services Inc (PWR), Gartner Inc (IT), Chesapeake Energy Corp (CHK), AmerisourceBergen Corp (ABC), Occidental Petroleum Corp (OXY), Viacom Inc (VIAB), Church & Dwight Co Inc (CHD), Incyte Corp (INCY), Zoetis Inc (ZTS), Apache Corp (APA), Kellogg Co (K)
  • First Word Street Wraps:

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