Fed Minutes Trigger a Negative Finish for Stocks


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"The market hovered just above the breakeven line for much of the day, but that all came to an end after the Federal Open Market Committee (FOMC) minutes were released at 2 p.m. ET," observed Schaeffer's Senior Equity Analyst Joe Bell, CMT. "The major headline from the release was that the Fed is likely to taper in the coming months, provided there is stronger economic data to support it. Overall, the market's reaction was quite negative." Against this backdrop, the Dow Jones Industrial Average (DJI) closed firmly in the red.

Continue reading for more on today's market, including :

    The Fed's latest meeting minutes triggered worry on the Street, retail sales climbed unexpectedly in October, and J.C. Penney Company, Inc. ( JCP ) spiked on upbeat guidance.

The Dow Jones Industrial Average (DJI - 15,900.82) was parked in positive territory for much of the day, but tumbled mid-afternoon to close 66.2 points, or 0.4%, lower. Microsoft Corporation ( MSFT ) led the Dow's nine advancers with a gain of 0.9%, while a 3.3% loss for The Boeing Company ( BA ) paced the 21 laggards.

The S&P 500 Index (SPX - 1,781.37) also stumbled later in the session, and finished with a drop of 6.5 points, or 0.4%. Meanwhile, the Nasdaq Composite (COMP - 3,921.27) lopped off 10.3 points, or 0.3%.

Elsewhere, the CBOE Volatility Index (VIX - 13.40) spiked right out of the gate, but lost momentum throughout the day to close fractionally higher.



A Trader's Take :

"We actually saw better-than-expected retail sales numbers this morning," continued Bell. "With the holidays coming soon, expectations for the season continue to be quite low, which means it might not take much to exceed them."

3 Things to Know About Today's Market :

  • The Fed said it has no plans to taper right now , but some investors inferred that a scaling back of the central bank's bond-buying program could come in the near future. According to the latest Federal Open Market Committee (FOMC) minutes, the Fed is looking for economic growth that "would prove consistent with the Committee's outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pace of purchases in coming months." (CNBC)
  • The National Association of Realtors reported that existing home sales fell by a slightly larger-than-expected 3.2% in October to an annual rate of 5.12 million, marking their lowest level in fourth months. However, the group said the government shutdown may have contributed to the latest reading. (Bloomberg)
  • Retail sales rose by a seasonally adjusted 0.4% last month, according to the Commerce Department, due largely to an increase in auto purchases. Economists, on average, had expected overall sales to remain unchanged. (MarketWatch)

5 Stocks We Were Watching Today :

  1. Wall Street rookie Twitter Inc ( TWTR ) was slapped with a downgrade ahead of the opening bell.
  2. The latest Weekly Contrarian takes a closer look at Tyson Foods, Inc.'s (TSN) technical and sentiment backdrop.
  3. Cisco Systems, Inc. (CSCO) attracted near-term call buyers, despite the stock's recent tumble on the charts.
  4. An upbeat sales outlook -- and some reassuring words from its CEO -- pushed J.C. Penney Company, Inc. ( JCP ) higher.
  5. QUALCOMM, Inc. (QCOM) saw a rare surge in put volume, despite some positive news for shareholders.


For a look at today's options movers and commodities activity, head to page 2.



Commodities :

Crude futures remained nearly flat amid news of a modest increase in oil supplies. By the close, the December contract -- which expired today -- shaved off one penny to settle at $93.33 per barrel. Meanwhile, January crude, the new front-month contract, edged 4 cents lower to finish at $93.85 per barrel.

Gold futures, on the other hand, tumbled amid a mixed bag of economic data and a strengthening dollar. December-dated gold declined $15.50, or 1.1%, to end at $1,258 per ounce -- the lowest price for a most active contract since July 10. What's more, the precious metal slid further south in electronic trading following the release of the FOMC minutes.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

This article appears in: Investing Options
Referenced Stocks: BA , JCP , MSFT , NOK , TWTR

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