Closing Update: Stocks Close Lower as Traders Weigh Conflicting Fed Statements
Stocks closed mostly lower Tuesday with the Dow Jones Industrials and the S&P 500 backing away from their record highs yesterday after a voting member next year on the Federal Reserve's policy-setting panel today said the central bank's stimulus efforts won't last indefinitely. Markets found a late bounce, lifting most sectors in the S&P 500 off their worst levels of the day and returning the Nasdaq to even after another Fed District president said a Fed tapering would be a "drag on progress."
Dallas Fed President Richard Fisher sent global equity markets skidding earlier this morning, saying during a CNBC television interview that the central bank's $85 billion in monthly asset purchases cannot go on "forever" as the Fed's balance sheet becomes more "bloated." Fisher is one of the more hawkish members at the Fed and will become a voting member on the Federal Open Markets Committee at the end of January and, as a result, his comments are starting to carry more weight with investors.
But Minneapolis Fed President Narayana Kocherlakota helped ignite a late surge for stocks after he told the St. Paul, (Minn.) Chamber of Commerce he believes any tapering of the Fed's $85-billion asset purchase program would hinder the "already slow rate of progress" of the economy towards the goal of 6.5% unemployment. Instead, Kocherlakota thinks the Fed should increase its asset purchases, providing more monetary stimulus.
Mixed economic data this morning also did not offer much direction for the markets: the National Federation of Independent Business optimism index fell from a 93.9 reading in September to a 91.6 score last month, also trailing the expert consensus. But any negative response to the NFIB report was offset by the ICSC- Goldman Sachs' same-store sales index of the 20 largest U.S. retailers climbing 1.2% last week over the prior week's 0.6% decline. Year-over-year sales were up 2.3%, making for the best report since August.
Also, the Chicago Fed National Activity index, measuring overall economic activity and inflation, was unchanged during September at 0.14.
Crude oil for December delivery settled $2.10 lower at $93.04 per barrel while December natural gas ended 4 cents higher at $3.62 per 1 million BTU.December gold slid $10 to $1271.20 per ounce while December silver fell 51 cents to $20.77 per ounce. December copper dropped 3 cents to settle at $3.23/lbs
Here's where the U.S. markets stood at end-of-day:
Dow Jones Industrials Index down 32 points, or 0.2%, at 15,750
S&P 500 down down 4 points, or 0.2%, at 1,767
Nasdaq Composite Index unchanged at 3,919
(+) OTIV, Electronic payment-processing company Monday says its OTI Africa subsidiary received more than $1 mln in purchase orders for its EasyFuel Plus system.
(+) VNDA, FDA concludes the company's Tasimelteon drug candidate is effective treating Non-24-Hour disorder in the total blind, the first treatment since the disorder was identified in 1948.
(+) PERI, Q3 revenue rises 31% year over year to $21.3 mln, also beating the analyst consensus by around $200,000. EPS of $0.31 topped the Capital IQ consensus by $0.08 per share.
(-) SRPT, FDA pulls the company's Eteplirsen drug candidate off the fast track for approval, citing "considerable doubts" about results from a small Phase II study of the prospective treatment for Duchenne muscular dystrophy.
(-) HSOL, Reports non-GAAP Q3 net loss of $0.78 per share. Revenue declines 4% from the prior quarter to $185 mln. No analyst estimates were available for comparison.
(-) HOLX, Cut to Hold from Buy at Canaccord Genuity after issuing weak Q1 guidance, which analyst Jason Mills said "painted an even worse picture of current fundamentals." Also, RBC drops to Sector Perform from Top Pick.