The stock markets in the United States extended gains today driven primarily by the stance of policymakers to wait for more economic data before raising interest rates.
Yesterday, the minutes of the September meeting of the Federal open Market Committee (FOMC) showed that policymakers are concerned about the weakening Chinese economy that could spill over globally, and the low interest rate.
“Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term. Nonetheless, the Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate,” according to the FOMC.
Dennis Lockhart, president of the Atlanta Federal Reserve Bank said the U.S. economy “remains on a satisfactory track” and projected that the central bank will probably raise interest rates later this month or in December.
The S&P 500 reached 2.014.91 points, recording its highest weekly gain this year. The index gained 7.9% from its lowest level from the selloff in August. The S&P 500 increased 4.9% since the end of the quarter, according to Bloomberg.
The Dow Jones rose 0.20% to 17,084.49 points, the NASDAQ gained 0.41% to 4,830.47 points, and the Russell 2000 climbed 0.18% to 1,165.36 points.
Investors will now focus on corporate earnings
Brian Jacobsen, chief portfolio strategist at Well Fargo Advantage Funds commented, “Policy makers are trying to be prudent with policy, but not panicking over the global outlook. We’ll see whether or not we can hold above 2,000 in the S&P 500 and build from here ahead of earnings.”
On the other hand, Bob Doll, chief equity strategist at Nuveen Asset Management said, “Earnings are going to dominate the next few weeks. Once we get guidance from Corporate America, investors will be reasonably more confident about getting back into the market.”
Market gainers
The stock price of Apple (NYSE:AAPL) climbed more than 2% to $112.09 per share. The iPhone maker removed several ad-blocking apps from its App Store due to privacy concerns. Apple said the removed apps install root certificates that could allow monitoring of data, which could be used to compromise SSL/TLS security solutions.”
Lumber Liquidators (NYSE:LL) gained more than 14% to $18.86 after disclosing its settlement agreement with the U.S. Department of Justice (DOJ) regarding the investigation related to its violation with the Lacey Act.
UTi Worldwide (NASDAQ:UTIW) is today’s biggest gainer among the companies listed on NASDAQ. The stock rose 51% to $7.13 per share. The company agreed to be acquired by DSV, the sixth-largest logistics company worldwide, for $7.10 per share or $1.35 billion.
The stock value of Horsehead Holding (NASDAQ:ZINC) increased more than 23% to $5.51 per share. The company received an average stock rating of Hold by five analysts. The 12-month average price target on the stock is $12 per share.
Market losers
The stock price of Alcoa declined almost 7% to $10.26 per share. The company reported third-quarter earnings and revenue that were below the consensus estimate of Wall Street analysts. Alcoa posted $0.02 per share and $5.57 billion in revenue. Analysts expected the company to deliver earnings of $0.13 per share on $5.65 billion in revenue.
Gap (NYSE:GPS) dropped more than 5% to $27.42 per share. Analysts at MKM Partners downgraded their rating on the stock from Buy to Hold and reduced their price target from $40 to $29 per share.
Southwestern Energy (NYSE:SWN) declined more than 5% to $12.81 per share. Analysts at Zacks Equity Research recommended a Hold rating on the stock. On the other hand, analysts at BMO Capital Markets recently reduced their price target on the stock to $18 from $20 per share.
