Staying true to expectations, the Federal Reserve refrained
from tapering the $85 billion bond buyback plan but its bearish
growth outlook dragged benchmarks into the red. The S&P 500
snapped its record run, as some experts cited profit booking to
be one of the factors for the southward move. Moreover,
September's Consumer Price Index grew marginally and the ADP
employment report for October lagged estimates. All S&P 500
industry groups finished in negative territory and consumer
staples stocks suffered the most.
CVS CAREMARK CP (CVS): Free Stock Analysis
GENERAL MOTORS (GM): Free Stock Analysis
COCA COLA CO (KO): Free Stock Analysis Report
LINKEDIN CORP-A (LNKD): Free Stock Analysis
PROCTER & GAMBL (PG): Free Stock Analysis
PHILIP MORRIS (PM): Free Stock Analysis
WAL-MART STORES (WMT): Free Stock Analysis
To read this article on Zacks.com click here.
For a look at the issues currently facing the markets, make sure
to read today's
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) slipped 0.4% to close the
day at 15,618.76. The S&P 500 declined 0.5% to finish
yesterday's trading session at 1,763.31. The tech-laden Nasdaq
Composite Index fell 0.6% to end at 3,930.62. The fear-gauge CBOE
Volatility Index (VIX) added 1.8% to settle at 13.65.
Consolidated volumes on the New York Stock Exchange were 3.55
billion shares. Declining stocks outnumbered the advancers. For
68% shares that declined, only 29% advanced.
As expected, the Federal Reserve decided not to taper its $85
billion bond buying program due to a series of weak domestic
reports in recent days. But what disappointed investors was its
growth outlook for the economy. The central bank said even though
it will continue with its stimulus program at its current pace,
for the time being the growth outlook is not encouraging. Market
experts said the Fed's statement this time were not as "dovish"
as expected. The Federal Open Market Committee said: "Available
data suggests that household spending and business fixed
investment advanced, while the recovery in the housing sector
slowed somewhat in recent months."
According to the US Department of Labour, the Consumer Price
Index (CPI) for the month of September grew marginally, by 0.2%,
in line with the consensus estimate. All the major energy
component indexes rose during the month, leaving the food index
unchanged. The all items index increased 1.2% over the year, the
smallest 12 month increase since April. The index for all items
less food and energy grew 1.7% while shelter and medical care
indexes both increased 2.4%. The food index increased 1.4%
whereas the energy index has dropped 3.1%.
Separately, the ADP employment report for October reported that
the U.S. non farm private sector added 130,000 jobs. This was
below the expected increase of 150,000. Small business added
37,000 jobs, 13,000 jobs were added in medium business and 81,000
additions were made in large business.
On the earnings side, General Motors Company (NYSE:
) came out with better-than-expected third quarter results.
Adjusted earnings of $1.6 billion or 96 cents per share in the
third quarter outpaced the Zacks Consensus Estimate of 91 cents
per share. However, on a reported basis, net income dropped 53%
after including a net loss of $0.9 billion or 51 cents per share
from special items in the reported quarter. Shares jumped more
than 3% after the company announced its quarterly results.
Also, LinkedIn Corp.'s (NYSE:
) third quarter earnings beat the Street's expectations. However,
it reported a $3.4 million net loss in the quarter compared to
net income of $2.3 million a year ago. Following the earnings
release on Tuesday, shares of LinkedIn dropped over 9% yesterday.
The Consumer Staples sector was the biggest loser among the
S&P 500 industry groups and the Consumer Staples SPDR (XLP)
lost 0.9%. Stocks such as the Procter & Gamble Company (NYSE:
), The Coca-Cola Company (NYSE:
), Philip Morris International Inc. (NYSE:
), Wal-Mart Stores, Inc. (NYSE:
) and CVS Caremark Corporation (NYSE:
) declined 1.1%, 0.5%, 1.1%, 0.2%, 0.5%, respectively.