NEW YORK, Aug 1 ― Wall Street had a mixed reaction yesterday after the expected interest rate cut by the US Federal Reserve, the first in a decade, failed to impress investors.
After spending much of the session in wait-and-see mode ahead of the Fed's announcement, the S&P 500 and the Dow were essentially flat, with the Nasdaq slightly higher.
But all were on track to post their second straight monthly gains, closing the book on a month during which the S&P 500 and the Nasdaq reached fresh record highs.
Market participants were expecting the central bank to lower the Fed funds target rate by 25 basis points as insurance against signs of a looming economic slowdown amid the protracted US-China trade war.
“It's smart of them to go ahead and take out some insurance here,” said Brett Ewing, chief market strategist at First Franklin Financial Services in Tallahassee, Florida.
“Typically, the initial market reaction is only a knee jerk.” Ewing added. “What is important to focus on right here is we will be waiting for the press conference and the dot plot and taking a look at their guidance.”
Trade talks wrapped up in Shanghai, with US and Chinese negotiators leaving the table without a deal. But both sides called the talks “constructive.”
The Dow Jones Industrial Average fell 12.56 points, or 0.05 per cent, to 27,185.46, the S&P 500 lost 0.02 points, or -0.00 per cent, to 3,013.16 and the Nasdaq Composite added 15.38 points, or 0.19 per cent, to 8,289.00.
Of the 11 major sectors in the S&P 500, six were in the black, with real estate and energy suffering the largest percentage losses.
Second-quarter earnings season charges ahead, with 296 of the companies in the S&P 500 having reported. Of those, 74.7 per cent have surprised Street estimates to the upside, according to Refinitiv data.
Analysts now see total growth of 1.3 per cent for the quarter, up from just 0.3 per cent seen at the beginning of the month, per Refinitiv.
Apple Inc extended its gains, rising 4.3 per cent after an increase in services and wearables more than offset a drop in iPhone sales.
Humana Inc rose 5.3 per cent after the health insurer beat analysts' second-quarter earnings estimates and hiked its 2019 forecast.
Video game maker Electronic Arts Inc reported better-than-expected quarterly revenue, driven by continued success of its battle royale game “Apex Legends,” sending its stock up 4.4 per cent.
Among losers, shares of General Electric Co sank -1.8 per cent after the conglomerate posted a quarterly loss and announced the retirement of its Chief Financial Officer Jamie Miller.
Chipmaker Advanced Micro Devices Inc slumped 8.3 per cent after its disappointing third-quarter revenue forecast, dragging the Philadelphia Semiconductor index down 1.5 per cent.
Molson Coors Brewing Co dropped 7.3 per cent after weak demand hit its quarterly profits. The beer maker also announced the retirement of Chief Executive Officer Mark Hunter.
On the economic front, The ADP National Employment Report, showed private employers added 156,000 jobs in July, 4,000 fewer than economists expect tomorrow's more comprehensive report from the US Labor Department to show.
Advancing issues outnumbered declining ones on the NYSE by a 1.47-to-1 ratio; on Nasdaq, a 1.38-to-1 ratio favoured advancers.
The S&P 500 posted 32 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 105 new highs and 56 new lows. ― Reuters
