Wall Street Ekes Out Slim Gains After Apple and Ahead of the Fed
Although the Dow Jones Industrial Average (DJI) jumped to a multi-year peak right out of the gate — thanks to a German court’s approval of the euro-zone bailout fund — the major benchmark pared most of its gains as investors focus on the outcome of the Federal Open Market Committee (FOMC) meeting.
“With Germany allowing for the European bailout to proceed, that helped quell some uncertainty out there and produced some early buying,” said Schaeffer’s Senior Technical Strategist Ryan Detrick. “Nevertheless, as the day wore on, we realized we have yet another big market-moving event on the horizon in the form of whether the Fed will induce ‘QE3′ or not tomorrow. That pulled us back and helped us end flat on the day, as traders didn’t want to make any big moves ahead of that event.”
The Dow Jones Industrial Average (DJI – 13,333.35) rallied up to an intraday peak of 13,373.62 within the first half-hour of the session, but gradually pared its gains throughout the day. By the time the smoke cleared, the blue-chip barometer finished just 10 points, or 0.1%, higher, but still secured its highest close in nearly five years.
Verizon Communications Inc. ( VZ ) and General Electric Company ( GE ) led the Dow’s 18 advancers with gains of 1.5% and 1.4%, respectively. Meanwhile, the 12 decliners were led by DuPont ( DD ), which shed 1.6%.
The S&P 500 Index (SPX – 1,436.56) notched its own multi-year high today, climbing all the way to 1,439.15 before pulling back. The SPX finished three points, or 0.2% higher, marking a second consecutive close above the 1,430 level.
Meanwhile, the Nasdaq Composite (COMP – 3,114.31) also trekked into the black, gaining 9.8 points, or 0.3%, by the close — and finishing above 3,100 for a fifth straight session.
The CBOE Market Volatility Index (VIX – 15.80) fell 0.6 point, or 3.7%, dipping below support at its 20-day moving average.
“Housing kicked tail yet again. Sure the market was flat, but housing stocks did great, with many breaking out to new highs,” remarked Ryan. “You have to wonder if this was smart money accumulating ahead of the Fed, with the mindset that they’ll say something very accommodative to the economy and housing market tomorrow. Thursday has the potential to be fun day.”
Oil futures slipped today, after the Energy Information Administration (EIA) surprised analysts by reporting a sizable surge in crude inventories. However, that data was largely offset by rising tensions in the Middle East, which effectively provided a floor for black gold. October-dated crude ended the day off 16 cents, or 0.2%, at $97.01 per barrel.
Gold also recorded a lackluster session, with the precious metal wrapping up a see-saw session on the south side of breakeven. Ahead of Thursday’s ruling on U.S. monetary policy, traders seemed unwilling to make any major moves. Gold for December delivery settled on a loss of $1.20, or 0.1%, at $1,733.70 per ounce.