Stock market today: Dow drops records, Fed meets, Zillow crashes


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The press conference by Fed Chairman Jerome Powell on Wednesday afternoon will be closely watched.

Kevin Dietsch / Getty Images

The


Dow Jones Industrial Average

was down slightly on Wednesday after closing at a record low on Tuesday as markets await the Federal Reserve’s monetary policy decision.

In afternoon trading, the Dow Jones lost 139 points, or 0.4%, after the benchmark blue chip index closed above 36,000 for the first time. The


S&P 500

fell 0.1%, while the


Nasdaq Composite

was up 0.1%. All three indices ended Tuesday at new all-time highs.

Today the spotlight is on the Federal Open Market Committee (FOMC), the monetary policy body of the Federal Reserve. Its monthly meeting began on Tuesday and will end on Wednesday with a statement from Fed Chairman Jerome Powell.

“I think the equity market will wait for the [Fed] news, ”said James Camp, managing director of strategic revenues at Eagle Asset Management.

The Fed has bought $ 120 billion in bonds to keep their prices high and yields low since June 2020, when it stabilized after more fervent bond purchases near the start of the pandemic.

Markets now widely expect the Fed to start slowing down these purchases, which consist of Treasury securities and agency mortgage-backed securities, at a rate of around $ 15 billion per month, from this month. If the central bank announces a faster pace, investors could react negatively and that could put pressure on stocks.

The biggest risk is that the Fed could signal that it is considering short-term interest rate hikes sooner rather than later. With soaring inflation and slowing economic growth, an indication of a rate hike too soon could also cause stocks to sell off.

“It is widely expected that the central bank will start shrinking in November or maybe December,” wrote Kent Engelke, chief economic strategist at Capitol Securities Management. “The question is whether or not he will change his schedule as to when he intends to increase the overnight rate.”

As the Fed looms, not even strong economic data could push stocks higher. ADP’s jobs report showed the United States created 571,000 private sector jobs in October, above consensus forecast of 395,000.

Read also : Is inflation here to stay? The data is cause for concern. The Fed will have its say today

Overseas, Hong Kong


Hang Seng Index

slipped 0.3% as investors in Asia hovered ahead of the FOMC meeting. The pan-European


Stoxx 600

rose 0.4% as European investors adopted a similar wait-and-see stance.

In commodities markets, oil prices have fallen amid indications that the supply of U.S. crude is higher than expected and pressure on the OPEC + group of domestic producers to increase production.

U.S. West Texas Intermediate crude futures fell 3.2% to around $ 81.22 after trading near $ 85 earlier in the week, the highest levels since late 2014 .

Analysts on Tuesday cited data from the American Petroleum Institute showing that U.S. crude inventories jumped 3.6 million barrels last week, far more than the estimated 1.5 million, which surprised forecasts of ‘supply. This highlights official data Wednesday from the US Energy Information Administration.

Here are seven actions in motion Wednesday:


Lyft

(ticker: LYFT) the stock gained 8% after the company’s earnings report showed a more than 50% increase in adjusted earnings before interest, taxes and non-cash expenses. Sales were $ 864 million, above expectations of $ 863 million.

Lyft’s results helped compete


Uber

(UBER) stock rose 6.1% ahead of its earnings report on Thursday.


Bed bath and beyond

(BBBY) gained 22% after the company announced an increased share buyback program and a partnership with


Kroger

(KR) to sell certain products at grocers and through online channels. Previously, Bed Bath & Beyond stock had risen 60%, benefiting from its “meme stock” status as the initial purchase forced short sellers to buy back stocks.

Basically, the company’s new plans show that it is trying to move towards a digital sales strategy. “The launch of a digital market and the collaboration with Kroger demonstrate management’s willingness to think outside the box, accelerate digital transformation and add new sources of revenue, although it is too early to project. the financial benefits of these two initiatives, ”wrote Joe Feldman, Telsey analyst.

Kroger, which will charge fees on Bed Bath & Beyond, saw its stock gain 4.3%.

Zillow Group (ZG) shares fell 20% after seeing several analysts downgrade after the company announced it would end its home buying and selling business.


Shake Shack

(SHAK) stock gained 8.1% after upgrading to Buy from Neutral at Northcoast.


CVS Health

(CVS) rose 4.5% after the company reported earnings of $ 1.97 per share, beating estimates of $ 1.78 per share, on revenue of $ 73.8 billion , higher than expectations of $ 70.5 billion.

Write to Jacob Sonenshine at [email protected]

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