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Wall Street indexes rose amid the change of Fed’s tone on interest rates

Wall Street indexes rose on Wednesday after the Federal Reserve kept interest rates unchanged and confirmed that tightening of the monetary policy would be done patiently.

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Wall Street indexes rose on Wednesday after the Federal Reserve kept interest rates unchanged and confirmed that tightening of the monetary policy would be done patiently.

The blue-chip index Dow Jones Industrial Average rose by 434.90 points, with Boeing and Apple are among the best-performing companies. The broader S&P 500 rose by 1.55%, while the technology index Nasdaq Composite appreciated by 2.2%.

Dow Jones

Federal Reserve central bankers voted unanimously to keep interest rates unchanged between 2.25% and 2.2%.

The current statement of Fed missed a phrase that has been constantly present over the past few years, namely the “further gradual increase” of interest rates. Now this expression has been replaced by “taking a more cautious approach”. That means the Fed is ready to either increase or reduce interest rates according to economic conditions.

The private sector added 213,000 jobs in January, according to the payroll processing firm ADP. That came in higher than the Wall Street estimate for 178,000. This comes ahead of Friday’s nonfarm payroll report from the labor department. Employers are expected to have added 165,000 workers with the unemployment number holding at 3.9%.

In the evening, the Euro rose against the US dollar by 0.45% to 1.1485 USD.

Oil prices are rising, with WTI crude oil futures appreciating by 1.67% and Brent oil rose by 0.54%.

Corporate stocks performance

The shares of the US aircraft manufacturer Boeing rose by 6.25% after the company announced its fourth-quarter earnings, which surpassed analysts’ expectations. The concern registered annual revenues of over 100 billion USD for the first time and presented a strong forecast for the current year.

The stocks of the technology giant Apple rose by 6.8% on the background of the quarterly earnings report, which the company presented after the bell on Tuesday.

McDonald’s beat estimates for quarterly same-store sales on Wednesday, powered by a strong international performance. Global sales rose by 4.4%. Excluding items, the company earned 1.97 USD per share, beating the 1.89 USD analysts on average had expected.

AMD shares also rose by nearly 20%.

The stocks of FAANG companies appreciated strongly with Facebook adding 4.32%, Netflix rose by 3.58%, Amazon growing by 4.8% and Alphabet rising by 2.8%.

Corporate earnings reports

By the end of this week, more than 100 S&P 500 companies will publish their quarterly results. So far, 71% of the companies posted earnings reports that have exceeded revenue expectations.

The results showed a 15% fall in sales of the iPhone in the three months ending to December 29th, diving from 61.1 billion USD in 2017, down to 51.9 billion USD per year later. Mac, iPad and the Wearables, Home and Accessories category all experienced an increase in net sales, but the most notable growth came from Apple’s services — which includes its Apple Music streaming platform, the App Store, iCloud storage and Apple Pay — jumping 19%, from 9.1 billion USD to 10.9 billion USD year-on-year. However, combined, the hole left by weak iPhone sales resulted in a total drop to 84.3 billion USD.

The US aircraft manufacturer Boeing reported record revenues of more than 100 billion USD for 2018 on strong demand and raised its target for commercial aircraft deliveries this year by more than 10%. The group reported core earnings per share of 16.01 USD, citing record commercial deliveries and higher defense volumes as drivers for the strong performance. The company, which last year delivered 806 jets, struck a bullish tone on deliveries for this year, saying it expected to hand over between 895 and 905 jets in 2019.