Telecoms stocks were the biggest gainers of the day
All three main U.S. stock indexes ended at all-time highs on Tuesday, 19 September 2017 as Federal Reserve policy makers began a two-day policy meeting in which they're expected to finalize the details of their plan to begin slowly shrinking the central bank's $4.5 trillion balance sheet.
The Dow Jones Industrial Average rose 39.45 points, or 0.2%, to close at 22,370.80, extending its win streak to eight sessions and notching its 41st record close of the year. The S&P 500 index rose 2.78 points, or 0.1%, to 2,506.65, closing at a record for the 36th time this year. Tuesday's gain is its sixth in the past seven sessions. The Nasdaq Composite Index rose 6.68 points to 6,461.32, a gain of 0.1%. The tech-heavy index set a record for the 49th time in 2017 and is currently up 20% year-to-date.
Telecoms stocks were the biggest gainers of the day followed by the financial sector.
The Federal Open Market Committee is widely expected to say it will start reducing its $4.5 trillion portfolio of government securities when it releases its policy update on Wednesday. Rates are forecast to stay on hold, but traders will be looking hints if more hike are coming later in the year.
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The dollar gave up some of its recent gains ahead of the Fed meeting, with the ICE Dollar Index fell 0.4% on Tuesday.
President Donald Trump gave his first address to the United Nations General Assembly, and at one point stated that the U.S. was ready, willing and able to act against North Korea militarily, and that the U.S. would totally destroy the country if necessary. Markets were little impacted by the speech.
Tuesday's batch of economic data, included August Housing Starts, August Import/Export Prices, and the Current Account Balance for the second quarter. Housing starts decreased to a seasonally adjusted annualized rate of 1.180 million units in August (consensus 1.170 million), down from a revised 1.190 million units in July (from 1.155 million). Building permits increased to a seasonally adjusted 1.300 million in August (consensus 1.212 million) from a revised 1.230 million in July (from 1.223 million). The key takeaway from the report is that the pace of single-family starts isn't quick enough to alleviate the supply pressures in the housing market that are crimping affordability for prospective homeowners. That isn't expected to improve next month either when the force of the impact from Hurricanes Harvey and Irma weighs on housing starts activity. Import prices excluding oil rose 0.3% in August after declining 0.1% in July. Export prices excluding agriculture increased 0.7% in August after rising 0.3% in July. The key takeaway from the Import-Export Price Index report for August is that it will keep the possibility of a December rate hike on the table. Separately, the current account deficit for the second quarter totaled $123.1 billion (consensus -$115.1 billion). The first quarter deficit was revised to $113.5 billion from $116.6 billion.
Bullion prices ended mixed at Comex on Tuesday, 19 September 2017. Gold edged lower on Tuesday, marking its third consecutive daily loss as U.S. equities nudged further into record territory as the Federal Reserve began a two-day policy meeting. Silver moved up.
Gold for December delivery edged down by 20 cents to settle at $1,310.60 an ounce. It's now posted declines in six out of the last seven sessions. December silver climbed by 12.3 cents, or 0.7%, to $17.279 an ounce.
Crude oil futures ended lower on Tuesday, 19 September 2017, a day after the U.S. benchmark settled at a seven-week high, as traders weighed prospects for the extension of OPEC-led production cuts and looked to upcoming weekly data on U.S. crude supplies and output.
On the New York Mercantile Exchange, October West Texas Intermediate crude, the U.S. benchmark, shed 43 cents, or 0.9%, to settle at $49.48 a barrel, after touching a high of $50.42. On Monday, prices barely budged, but marked the highest settlement since the end of July. The October contract expires at the end of Wednesday's session.
November Brent crude, the global benchmark, lost 34 cents, or 0.6%, to $55.14 a barrel on the ICE Futures Europe exchange.
The yield on the 2-yr Treasury note finished flat at 1.39% while the benchmark 10-yr yield climbed one basis point to 2.24%.
On Wednesday, investors will receive just two economic reports -the weekly MBA Mortgage Applications Index and the August Existing Home Sales Report (consensus 5.42 million) at 7:00 ET and 10:00 ET, respectively. In addition, the FOMC will release its latest policy directive at 14:00 ET.
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