Markets in 5Thursday, October 29
Stocks edge up as Fed holds and software sells off
The S&P 500 closed at a third straight gain after the Fed held rates, while software and Alphabet fell after the bell and futures slipped overnight.
Stocks
S&P 500 rises 0.3% to 7,743.98
The S&P 500 rose 21.38 points, or 0.3%, to 7,743.98 on Wednesday, its third straight gain. The Dow gained 97.53 points to 52,475.10, the Nasdaq Composite rose 0.3% to 26,549.85 and the Russell 2000 added 0.4% to 2,830.51. Gains were narrow, with the equal-weight S&P ETF (RSP) down 0.04% while the cap-weighted index rose. Over the week the S&P was up 1.6% and the Nasdaq 2.3%.
The Fed
Fed holds rates steady in 10-2 vote
The Federal Reserve kept its target range at 3.75% to 4% after a 10-2 vote. Cook and Hammack dissented in favor of a quarter-point hike. Chairman Kevin Warsh said growth is strong and inflation too high, and the statement described activity as growing at a strong pace, versus solid in September. Traders see about an 85% chance of a December 9 hike, Yahoo Finance reported.
Rates
Ten-year Treasury yield rises to 5.05%
The 10-year Treasury yield closed at 5.05% on Wednesday, up 6 basis points from 4.99% the day before. The 2-year yield was 4.67%, leaving a 38 basis point 2s10s spread, and the 30-year rose to 5.37% from 5.30%. A year earlier the 10-year stood at 3.99%, according to official Treasury data.
Earnings
ServiceNow and Fortinet fall sharply after results
ServiceNow closed at $150.13, down 3%, then fell about 17% after hours to $124.45. Adjusted EPS of $1.00 missed the $1.02 expected, and fourth-quarter subscription guidance disappointed. Fortinet fell about 5.9% in the regular session and about 26% after hours; third-quarter revenue rose 20% to $2.08 billion, though service revenue guidance was cut. Alphabet fell about 9% after hours, with search revenue of $63.35B against a $64.96B estimate and negative free cash flow of $9.07B, even as cloud revenue rose 103% to $30.7B.
Commodities
Brent slips below $115 as gold closes lower
Brent crude fell to about $114.28 on Thursday, down 0.9%, after climbing above $115 a barrel on Wednesday. Traders weighed the risk of renewed military escalation between the US and Iran. Gold closed at about $4,037 on Wednesday, down 0.56%. The WSJ Dollar Index fell 0.12% to 97.18 on Wednesday.