Stocks Rise Ahead of Fed Day

 

 

The S&P 500 closed up less than a single point on the day. The index traded as much as 0.4% higher in early trading, but faded throughout the day on no specific news before rising into the close.

The S&P/Case-Shiller Home Price Index recorded year-over-year growth of 12.2% versus the 12.4% consensus. In reaction, the SPDR S&P Homebuilders ETF (XHB) outperformed the market today, up 1.0% at the close.

Consumer confidence came in at 80.3, which was slightly less than the 81.0 consensus.

In commodities, crude oil dropped $1.40 to $103.15 per barrel while gold fell 0.2% to $1,326 per ounce.The 10-year US Treasury yield rose by 2 bps to 2.60%.

Facebook (FB) finished up 5% on the day, climbing as high as $37.66. This is the closest the stock has traded to its IPO price of $38 since going public more than a year ago.

Coach (COH) tumbled 8.5% after releasing disappointing earnings before the market open.

In a continuation of its volatile action, the Nikkei 225 climbed 1.5% despite Japan) reporting disappointing household spending, unemployment, and industrial production.

The PMI manufacturing index will be released at 7:15 p.m. EDT tonight.

The ADP employment report will be released tomorrow at 8:15 a.m. EDT tomorrow morning. Private payrolls are expected to rise by 179K.

GDP will be released at 8:30 a.m. EDT, with second-quarter growth expected to come in at 1.1%.

The Chicago PMI will be released at 9:45 a.m. EDT. The index is expected to record a reading of 54.0 after seeing 51.6 last month.

The FOMC will be making an announcement regarding its monetary policy at 2:00 p.m. EDT. The target federal funds rate is expected to remain unchanged, though traders will be watching for details regarding tapering of QE activities.

Mastercard (MA), Questcor (QCOR), Sodastream (SODA) and Yelp (YELP) will be releasing earnings tomorrow.

The Rally Stalls

The S&P 500 continued the trend seen over the past few days. The index bottomed just before noon and rallied throughout the afternoon.

However, unlike on Thursay and Friday, the push higher stalled out and the S&P finished down 0.4% at 1685.

The pending home sales index came in better than expected at -0.4% versus the -1.4% consensus. However, last month’s increase of 6.7% was revised down to 5.8%. This drove underperformance in housing and financial stocks.

The Dallas Fed manufacturing survey came in worse than expected with a reading of 4.4 versus the 6.4 forecast by economists.

Gold rose $8 on the day to $1,330 per ounce. The 10-year yield rose 3 bps on the day to 2.59%. Crude oil was little changed on the day, closing at $104.60 per barrel.

Hertz Global Holdings (HTZ) reported earnings that fell short of analysts’ estimates, sending shares down 3% on the day.

Japanese household spending, unemployment rate, and industrial production will be released later tonight. The Nikkei 225 dropped 3.2% on the day, which was its second consecutive 3% decline, so more volatility is likely on the way.

 

The FOMC meeting will begin tomorrow morning.

On the data front, the ICSC-Goldman Retail Chain Store Sales and Redbook Index will be released tomorrow morning, as will the S&P/Case-Shiller Home Price Index and The State Street Investor Confidence Index.

AFLAC (AFL), Coach (COH), Merck (MRK), and Pfizer (PFE) are a few of the major companies releasing earnings tomorrow.