Apple, Boeing lift Wall Street as Fed stands pat

NEW YORK: US stocks rose on Wednesday, boosted by Apple, Boeing and General Electric following their quarterly results, though worries about the economic damage of the fast-spreading coronavirus kept gains in check.

Stocks showed little reaction to the Federal Reserve’s policy statement. The Fed, as expected, held rates steady while offering no new guidance on its balance sheet or mentioning any economic risks that could come about from the coronavirus outbreak in China.

Since the Fed’s last rate cut, in October, its third reduction of 2019, policymakers have agreed to keep their target policy rate in the current range of 1.50% and 1.75%.

“The biggest thing going on is earnings and obviously the coronavirus,” said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta.

“Earnings are coming in mixed to OK, but today your bellwether Apple was good,” he said. “But for the most part the underlying theme is there is all this stability out there in so many different factors – inflation is low, unemployment is low, wage growth is low and stable.”

Apple Inc gained 3.05% after the iPhone maker late Tuesday reported earnings for the holiday shopping quarter that topped analysts’ expectations, even as it braced for more disruptions in virus-hit China.

Boeing Co rose 2.65% after the planemaker forecast nearly $19 billion in costs related to the grounding of its 737 MAX jets, smaller than what many analysts had expected, and helping offset the company’s report of its first annual loss since 1997.

The Dow Jones Industrial Average rose 163.34 points, or 0.57%, to 28,886.19, the S&P 500 gained 14.76 points, or 0.45%, to 3,291, and the Nasdaq Composite added 49.66 points, or 0.54%, to 9,319.34.

READ  Health Insurance Innovations down 14% on shift to Medicare segment

As earnings gather pace, analysts expect profit for S&P 500 companies to be flat in the fourth quarter, an improvement over the 0.6% decline estimated at the start of the season, according to Refinitiv data.

General Electric jumped 10.19% after the industrial conglomerate set a higher cash target for 2020.

Several companies did warn of disruption to their operations due to the coronavirus outbreak, and a Chinese government economist was quoted as saying the country’s economic growth may drop to 5% or even lower.

Starbucks Corp dropped 1.99% after warning of a financial hit as it closed thousands of restaurants and adjusted operating hours in China.

Advancing issues outnumbered declining ones on the NYSE by a 1.52-to-1 ratio; on Nasdaq, a 1.12-to-1 ratio favored decliners.

The S&P 500 posted 46 new 52-week highs and eight new lows; the Nasdaq Composite recorded 75 new highs and 52 new lows.



Please enter your comment!
Please enter your name here