"We had a pretty poor advance reading of the first-quarter gross
domestic product (GDP), but most market participants remained
patient to hear the Fed's statement this afternoon," observed
Schaeffer's Senior Equity Analyst Joe Bell, CMT. "Well, the Fed
pretty much did what was expected, and the market reacted in turn.
Most sectors finished the day slightly higher, though we saw a
short-lived pullback following the announcement." The
Dow Jones Industrial Average (DJI)
spent the majority of the day in the green, getting within 40
points of its all-time high at its intraday peak before closing
with a modest gain.
Trading Topic of the Week
Continue reading for more on today's market, including
-- Tips to Trade Like the Pros:
Act like it's your job
. Don't expect to score big profits by dabbling. It's important to
stay engaged with the market on a daily basis.
Dow Jones Industrial Average (DJI - 16,580.84)
zigged and zagged throughout the session, ultimately coming to rest
on a gain of 45.5 points, or 0.3%. This was enough to secure a new
closing high for the blue-chip index. The Dow's 17 advancers were
paced by 3M Co (
), which added 1.1% today. At the back of the pack was Pfizer Inc.
), which gave back some of its recent gains to close off 1.5%. In
April, the Dow gained 0.7%.
S&P 500 Index (SPX - 1,883.95)
pressed higher as well, closing up 5.6 points, or 0.3%. Despite
weakness in some of its larger components, the
Nasdaq Composite (COMP - 4,114.56)
fought to secure a gain of 11 points, or 0.3%. The SPX rose 0.6% in
April, while the COMP surrendered 2%.
CBOE Volatility Index (VIX - 13.41)
continued to tumble on the day, settling with a loss of 0.3 point,
or 2.2%. On a month-over-month basis, the market's "fear gauge"
A Trader's Take
"One positive sign today was that the Fed stated they are seeing
a pickup in economic activity following a very rough winter in the
United States," added Bell. "This is definitely something the
market will continue to monitor, but I take it as a good sign that
they are attributing at least some of the poor performance the past
few months to winter, and not a broader slowing of the
5 Items on Our Radar Today
- The Federal Open Market Committee emerged from its
two-day policy meeting
with plans to scale back its asset-buying program to $45 billion
per month. This represents another monthly reduction of $10
billion, bringing the total tapering in monthly purchases to $40
billion. The central bank left interest rates unchanged, but
reiterated its timeline for adjusting the federal funds rate.
- The U.S. economy
expanded by just 0.1%
in the first quarter, according to the advance GDP reading. The
figure was short of economists' estimates and the fourth-quarter
rate of 2.6%. Elsewhere, the private sector
added 220,000 jobs in April
, according to ADP, topping economists' expectations. What's
more, the March reading was revised higher to reflect gains of
(Forbes; USA Today)
- Twitter Inc (
) was a
drag on the tech sector today
, after announcing its first-quarter earnings last night.
Investors focused on the company's rate of user-base growth,
which slowed to 25% from 30% the previous quarter. Revenue,
however, doubled to $250 million, edging past analysts'
estimates. TWTR shares lost 8.6% on the day and logged a new
all-time low of $37.24.
- Last-minute speculative bulls were active in the
Yelp Inc (
options pits ahead of the company's earnings report.
Apple Inc. (
muscled to another new annual high, option bulls displayed
confidence toward the remainder of the week.
For a look at today's options movers and commodities
activity, head to page 2.
Crude oil backpedaled today, following the U.S. Energy
Information Administration's report, which revealed commercial
crude inventories increased to a new record of 399.4 million
barrels. The June contract lost $1.54, or 1.5%, to settle at $99.74
per barrel. In April, black gold slipped 1.8%.
Gold futures were marginally lower in today's trading, but
continued to drift into the red after hours, following the Federal
Open Market Committee's policy statement. At the bell, gold for
June delivery was down 40 cents at $1,295.90 an ounce. On a monthly
basis, gold edged slightly less than 1% higher.