ALl ten sectors end in the green led by energy and industrial sectors
US stocks rallied on Tuesday, 28 October 2014 at Wall Street ahead of the Federal Reserve's two-day policy meeting, driving the S&P 500 and the Nasdaq Composite into positive territory. Federal Reserve officials are widely expected to announce the end to the 2008-era bond-buying stimulus program, while leaving the language on the statement broadly dovish. That generally means the central bank would be quick to signal a prolonged period of low rates, if the economy proves dicey.
The Dow Jones Industrial Average jumped 187.8 points, or 1.1%, to 17,005.75. The S&P 500 rose 23.42 points, or 1.2%, to 1,985.05. The Nasdaq Composite outperformed the main benchmark, rising 78.36 points, or 1.8%, to 4,564.29.
Broad-based gains were led by the energy and industrial sectors, which recovered some of the steep losses from Monday.
Equity indices climbed steadily throughout the day with the S&P 500 turning positive for the month of October. The index ended the day with an October gain of 0.6% after being down as much as 5.6% for the month during middle of October.
Focus of the market place is on the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve's regular meeting that began on Tuesday morning and ends Wednesday afternoon. As usual, the Wednesday afternoon statement from the FOMC will be very closely scrutinized by the market place. Most believe the Fed will formally end its monthly bond-buying program, called quantitative easing. Traders will also be looking for clues in the statement about future direction of monetary policy, including at what point the Fed will start to raise U.S. interest rates.
In overnight news, Sweden's central bank cut its main lending rate to zero percent Tuesday, in an attempt to produce some price inflation. The entire European Union is on the verge of serious price deflation. The European Central Bank has recently stimulated its monetary policy, and more measures are likely coming soon from the ECB.
Economic data at Wall Street included Durable Orders, Case-Shiller 20-City Index, and Consumer Confidence. September durable goods orders fell 1.3%, which was worse than the 0.6% increase expected. The drop followed the prior month's revised decline of 18.3% (from -18.4%) and was accented with a 2.8% decline in machinery orders, a 2.5% decline in computer and electronic product orders, and a 3.7% drop in orders for transportation equipment. Excluding transportation, durable orders decreased 0.2% (consensus 0.5%) to follow the prior month's revised increase of 0.7% (from 0.4%) . The Case-Shiller 20-city Home Price Index for August rose 5.6%, while a 5.5% increase had been expected by the consensus. This followed the previous month's increase of 6.7%.
The Conference Board's Consumer Confidence Index jumped to 94.5 in October from an upwardly revised 89.0 (from 86.0), while the consensus expected a reading of 87.2 Consumer confidence is now at its strongest point since October 2007 and has finally recovered from the Great Recession.
Among stocks under focus, Kohl's lowered its guidance. The stock fell 6.6% while Coach lost 6.0% after its bottom-line beat was not enough to signal a turnaround. In other earnings of note, Twitter slumped 9.8% after worse than expected monthly active user figures overshadowed in-line results.
Crude-oil futures rose on Tuesday, 28 October 2014 at Nymex ending a two-day losing streak as prices under $80 seemed to attract bargain hunters. Oil markets regained ground after Goldman Sachs on Monday slashed price forecasts for next year, denting prices. On the New York Mercantile Exchange, light, sweet crude futures for delivery in December rose 42 cents, or 0.5%, to settle at $81.42 a barrel.
Bullion prices nudged higher on Tuesday, 28 October 2014 at Comex as investors prepare for life after the Federal Reserve's bond-buying stimulus program ends. Gold prices ended the U.S. day session steady to modestly higher on Tuesday. The Fed is expected to announce the end of that program following the end of its two-day meeting on Wednesday.
Gold for December delivery edged up 10 cents to settle at $1,229.40 an ounce. Gold had fallen for two straight sessions after showing signs of life last week. December silver added 6 cents to $17.23 an ounce.
Treasuries slumped in the morning and finished near their session lows. The 10-yr yield rose three basis points to 2.29%.
Participation was in-line with recent averages as 779 million shares changed hands at the NYSE floor.
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while the FOMC policy directive will cross the wires at 14:00 ET.
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