U.S. Markets closed

Wall Street falls as Fed signals two more hikes this year

By Caroline Valetkevitch

(Reuters) - U.S. stocks ended a choppy session lower on Wednesday after the U.S. Federal Reserve raised interest rates as expected and projected a slightly faster pace of rate hikes this year.

Two more hikes are now expected by the end of this year, compared with one previously.

The central bank, which raised its benchmark overnight lending rate a quarter of a percentage point to a range of between 1.75 percent and 2 percent, also dropped its longstanding pledge to stimulate the economy "for some time."

Stocks were volatile after the statement but ended near the lows of the session, and selling was broad-based, with most S&P sector indexes ending lower. The Cboe Volatility index (.VIX) rose.

"The expectation now is for four rate increases in total in 2018. Consensus had been more like three, moving toward four, so I think that's a bit of a surprise," said Katie Nixon, chief investment officer at Northern Trust Wealth Management in Chicago.

"It seems as if the Fed is much more confident now in inflation reaching, in fact maybe breaching a little bit, their target, so they are pulling forward some of the rate increases.”

Fresh projections from policymakers suggested that inflation would run above the Fed's 2 percent target, hitting 2.1 percent this year and remaining there through 2020.

The Dow Jones Industrial Average (.DJI) fell 119.53 points, or 0.47 percent, to 25,201.2, the S&P 500 (.SPX) lost 11.22 points, or 0.40 percent, to 2,775.63 and the Nasdaq Composite (.IXIC) dropped 8.10 points, or 0.11 percent, to 7,695.70.

S&P financials (.SPSY), which tend to benefit from rising interest rates, ended down 0.3 percent.

"The financials are a bit of a puzzle. There's always a lag between the increases in deposit rates and fund costs and interest on loans," said Robert Eisenbeis, vice chairman and chief monetary economist at Cumberland Advisors in Sarasota, Florida.

"There's some processing and digesting going on."

Traders of U.S. short-term interest-rate futures increased bets the Fed will raise rates again this year and next after the Fed's statement.

A ruling Tuesday that approved AT&T Inc's (T.N) $85 billion deal to buy Time Warner Inc (TWX.N) put the spotlight on media and telecom shares, which mostly rose.

Shares of HBO channel owner Time Warner rose 1.8 percent. AT&T dropped 6.2 percent in its highest volume day ever, sending the S&P telecom services index (.SPLRCL) down 4.5 percent.

Shares of other telecom and media companies such as Sprint Corp (S.N), CBS Corp (CBS.N) and Discovery Inc (DISCA.O) ended higher.

After the bell, Comcast Corp (CMCSA.O) offered $65 billion for Twenty-First Century Fox Inc (FOXA.O) media assets. Twenty-First Century Fox shares were up 0.2 percent in after-hours trading, after closing the regular session up 7.7 percent. Comcast shares ended the session down 0.2 percent. Declining issues outnumbered advancing ones on the NYSE by a 1.99-to-1 ratio

The S&P 500 posted 40 new 52-week highs and two new lows; the Nasdaq Composite recorded 151 new highs and 24 new lows.

About 7.1 billion shares changed hands on U.S. exchanges. That compares with the 6.7 billion daily average for the past 20 trading days, according to Thomson Reuters data.



(Reporting by Caroline Valetkevitch; Additional reporting by Lewis Krauskopf in New York and Sruthi Shankar in Bengaluru; Editing by Meredith Mazzilli and Lisa Shumaker)

  • Suze Orman has a killer question for your retirement
    Business
    MarketWatch

    Suze Orman has a killer question for your retirement

    Suze Orman is one of those singular personalities in the financial business who seems to be right on the pulse of everyone she meets. She’s written books, starred in her own television show and made innumerable appearances in person. Like Oprah

  • Marijuana investors may lose 90% of their money in Canada, so consider the really big prize elsewhere
    News
    MarketWatch

    Marijuana investors may lose 90% of their money in Canada, so consider the really big prize elsewhere

    Marijuana presents a tremendous opportunity for investors over the next few years. Naïve investors are excited. The reality is that professionals will pick their pockets, and many naïve investors who are excited now will end up losing 90% of their investment.

  • Business
    Oilprice.com

    Oilfield Service Companies Bet On Full Recovery

    Growing Permian drilling and production started lifting last year the revenues and profits of the world’s top oilfield service providers who were badly bruised by the 2014 oil price crash. Schlumberger, Halliburton, and Baker Hughes saw their earnings in the past few quarters lifted by the return of frenzied drilling in North America, led by the Permian basin, while international operations lagged amid slower recovery in global investments in exploration and production. In July this year, the mood at Schlumberger and Baker Hughes in Q2 earnings was an upbeat outlook for the immediate future, with signs that the international market outside the U.S. was also on the road to recovery.

  • Business
    Benzinga

    Morgan Stanley's Recipe For Strong Q4 Guidance From Tesla

    Tesla Inc. (NASDAQ: TSLA) is set to report third-quarter earnings data in early November after a whirlwind of a quarter that included a chain of events that began Aug. 7 with CEO Elon Musk’s “funding secured” tweet and ended with a Securities and Exchange

  • Why Valero Energy, eBay, and New Age Beverages Slumped Today
    Business
    Motley Fool

    Why Valero Energy, eBay, and New Age Beverages Slumped Today

    Some major market benchmarks managed to hang onto their gains, but the Nasdaq Composite, and Russell 2000 indexes posted losses of 0.5% to 1.25%, and the S&P 500 was virtually flat. Valero Energy (NYSE: VLO), eBay (NASDAQ: EBAY), and New Age Beverages (NASDAQ: NBEV) were among the worst performers on the day. Valero Energy dropped 10% after the refinery company announced that it would buy back all outstanding units of its related MLP, Valero Energy Partners (NYSE: VLP).

  • Why Advanced Micro Devices, Inc. Stock Closed 11% Lower on Friday
    Business
    Motley Fool

    Why Advanced Micro Devices, Inc. Stock Closed 11% Lower on Friday

    Analyst Pierre Ferragu from financial firm New Street Research set his price target for AMD at $18 per share, arguing that the stock has been priced for a level of success that simply isn't realistic. "AMD's stock price reflects a scenario we don't believe possible," Ferragu wrote. In particular, Ferragu sees larger rival Intel (NASDAQ: INTC) getting its manufacturing act together as we speak.

  • Colorado’s Marijuana Market Just Hit This Huge Milestone
    Business
    Motley Fool

    Colorado’s Marijuana Market Just Hit This Huge Milestone

    Marijuana has been legally available in Colorado for recreational use since 2014, and consumers' appetite for marijuana products continues to grow due to the launch of new products, including concentrates and edibles. As a result, Colorado's annual marijuana sales surpassed $1 billion in August -- the earliest it has ever achieved that milestone. There's been some debate over how much money would move from the black market to regulated markets following legalization, but Colorado's experience suggests it's substantial.

  • Should Congress cut entitlement programs to combat rising deficit?
    Business
    Fox Business Videos

    Should Congress cut entitlement programs to combat rising deficit?

    Maya MacGuineas, Committee for a Responsible Federal Budget, and Wall Street Journal editorial page deputy editor James Freeman discuss America’s deficit problem and how President Trump asked members of his Cabinet to cut their departments’ budgets by 5 percent.

  • Amazon Earnings Preview: 5 Things to Watch
    Business
    Motley Fool

    Amazon Earnings Preview: 5 Things to Watch

    In the second quarter, revenue jumped 39% year over year and earnings per share soared 1,168%. Amazon stock has gained 77.6% over the one-year period through Oct. 18. Here's what to watch when Amazon reports.

  • 3 Energy Stocks You Can Buy and Hold for the Next Decade
    Business
    Motley Fool

    3 Energy Stocks You Can Buy and Hold for the Next Decade

    North America needs to build $23 billion of new natural gas-related infrastructure annually through 2035, according to a recent report. Three of the best positioned to capture this growth are Kinder Morgan (NYSE: KMI), Williams Companies (NYSE: WMB), and TransCanada (NYSE: TRP), making them great stocks to buy and hold in the coming decade. Kinder Morgan is already the largest natural gas pipeline company in North America, operating roughly 70,000 miles of pipeline.

  • 5 Retail Stocks That Could Follow in Sears’ Footsteps
    Finance
    InvestorPlace

    5 Retail Stocks That Could Follow in Sears’ Footsteps

    Once upon a time, Sears helped America become a healthy economy again in the post-War years. Back then, no one would’ve guessed that Sears would file for bankruptcy before 2020. Are my retail stocks really all that safe?

  • 3 Great Stocks Under $10
    Business
    Motley Fool

    3 Great Stocks Under $10

    Among the stocks you can currently purchase for less than $10 per share are Sirius XM Holdings (NASDAQ: SIRI), Annaly Capital Management (NYSE: NLY), and Infosys (NYSE: INFY), and below, we'll take a look at how long they're likely to remain this cheap for would-be investors. Sirius XM was a pioneer in the satellite radio industry, and it's been an investor favorite for years.

  • Business
    Investopedia

    Market Sell-Off 80% Over, Will Be Reversed by Stock Repurchases: JPMorgan

    Last week, global markets were hit with a widespread shock that weighed on nearly all asset classes, encompassing even the cryptocurrency space, once viewed as a type of "safe haven" bet unrelated to the broader market. In a note to clients on Thursday, JPMorgan equity strategist Dubravko Lakos-Bujas and team forecasted for U.S. equities to make a comeback as fundamentals come back into play, highlighting stock buybacks as a key driver of the nine-year-bull market, as reported by CNBC.

  • America’s Biggest Employer Isn’t Hiring Seasonal Employees This Year. Here’s the Reason Why
    Business
    Money

    America’s Biggest Employer Isn’t Hiring Seasonal Employees This Year. Here’s the Reason Why

    For the third year, Walmart won’t be hiring tens of thousands of seasonal employees to provide extra support during the holidays. Instead, Walmart is forgoing the long-standing practice in favor of giving it’s full- and part-time employees more hours and opportunities to earn extra cash. The idea, Walmart says, is to fulfill the wishes of many of its employees.

  • Looks like when millennials have some money, they get an ...
    AXP
    CNBC Videos

    Looks like when millennials have some money, they get an ...

    CNBC's 'Squawk on the Street' team discusses markets ahead of the market open.

  • Hate Taxes? 37 States Make Social Security Tax Free
    Business
    Motley Fool

    Hate Taxes? 37 States Make Social Security Tax Free

    Over the course of your career, you'll probably have tens of thousands of dollars in Social Security payroll taxes withheld from your paychecks. Workers are confident that by paying those taxes up front, they'll be able to collect Social Security benefits

  • Better Buy: Ford Motor Company vs. BMW AG
    Business
    Motley Fool

    Better Buy: Ford Motor Company vs. BMW AG

    Both Ford Motor Company (NYSE: F) and BMW -- or Bayerische Motoren Werke AG (NASDAQOTH: BMWYY) -- drew investors' attention earlier in the cycle, when sales and profits were growing and their management teams appeared to be executing better than most.

  • Frustrated GM investors ask what more CEO Barra can do
    Business
    Reuters

    Frustrated GM investors ask what more CEO Barra can do

    General Motors Co (GM.N) Chief Executive Mary Barra has transformed the No. 1 U.S. automaker in her almost five years in charge, but that is still not enough to satisfy investors. Ahead of third-quarter results due on Oct. 31, GM shares are trading about 6 percent below the $33 per share price at which they launched in 2010 in a post-bankruptcy initial public offering. The Detroit carmaker's stock is down 22 percent since Barra took over in January 2014.

  • This Marijuana Investment Firm's 11 Top Cannabis Picks for Explosive Growth
    Business
    Motley Fool

    This Marijuana Investment Firm's 11 Top Cannabis Picks for Explosive Growth

    The marijuana industry has become a hotbed of investment activity, and players of all sizes are looking to get into the action. On top of all the interest from ordinary investors, cannabis companies have seen demand rise from sophisticated institutional investors that have experience with deploying larger amounts of investment capital in search of high-growth opportunities. One of the most interesting marijuana investment specialists that investors can follow is Canopy Rivers (NASDAQOTH: CNPOF).

  • Marijuana stocks to watch: Aurora Cannabis investments may be more valuable than its pot
    News
    MarketWatch

    Marijuana stocks to watch: Aurora Cannabis investments may be more valuable than its pot

    Aurora Cannabis Inc. is a major pot producer, but if its bets on other cannabis companies continue to pay off, it may be able to stop actually growing weed on its own. Aurora (ACBFF)(CA:ACB) said recently its investments were worth more than C$700 million ($540 million) as of Sept. 21, bolstered in part by demand for pot stocks ahead of full legalization of marijuana in Canada on Wednesday. As the entire sector has benefited, so has Aurora’s portfolio, boosting the company’s fiscal fourth-quarter profit to C$79.9 million, after a loss of $20.8 million the year earlier.

  • This Refining Giant Is the Latest Energy Company to Give Up on Its MLP
    Business
    Motley Fool

    This Refining Giant Is the Latest Energy Company to Give Up on Its MLP

    The energy sector continues to experience a gigantic consolidation wave, which is causing master limited partnerships (MLPs) to drop like flies. Valero Energy (NYSE: VLO) is behind the latest disappearing act in the space after it agreed to buy out its MLP Valero Energy Partners (NYSE: VLP). Valero Energy launched Valero Energy Partners in late 2013, joining its refining rivals in creating an income-producing vehicle that would steadily buy its parent's midstream assets.

  • Finance
    Investopedia

    12 Stocks May Plunge as Investors 'Harvest' Tax Losses

    The fourth quarter began with a big stock market selloff, and many investors may be taking a close look at once-loved stocks in their portfolios that have disappointed with significant price declines this year. "Tax loss selling becomes a possible source

  • Why Procter & Gamble, Skechers USA, and Synchrony Financial Jumped Today
    Business
    Motley Fool

    Why Procter & Gamble, Skechers USA, and Synchrony Financial Jumped Today

    The stock market ended Friday mixed, with the Dow Jones Industrial Average picking up 0.26% even as the Nasdaq Composite and the S&P 500 posted modest declines. Market participants once again responded negatively to news of rising interest rates -- including the 10-year Treasury bond's jump in yield to the 3.2% mark -- as a potential signal that the long bull market in stocks was ending. Procter & Gamble (NYSE: PG), Skechers USA (NYSE: SKX), and Synchrony Financial (NYSE: SYF) were among the best performers on the day.

  • Will Cloud Growth Shine When Microsoft Reports Earnings?
    Business
    Motley Fool

    Will Cloud Growth Shine When Microsoft Reports Earnings?

    When it comes to cloud computing, Amazon Web Services is the undisputed leader, but many in the tech industry were surprised by the continued strong showing by Microsoft (NASDAQ: MSFT), which jumped into second place and is gaining on the leader. Investors will be watching several areas of the company's business when Microsoft reports the financial results of its fiscal first quarter after the market close on Oct. 24. Let's take a look at the company's recent results and several business segments that are likely to be key components to Microsoft's success or failure when it reports earnings.

  • Marijuana stocks to watch: Canopy Growth is the cannabis business’s $4 billion gorilla
    News
    MarketWatch

    Marijuana stocks to watch: Canopy Growth is the cannabis business’s $4 billion gorilla

    The following article is part of a package of stories that MarketWatch is publishing to mark the start of full legalization of cannabis for adult use in Canada on Wednesday. Smith Falls, Ontario–based Canopy Growth Corp. made headlines and drove cannabis stocks to new heights over the summer when it announced that Corona brewer Constellation Brands Inc. was going to invest an additional $4 billion in the company. Billed by both companies as a strategic partnership, the additional $4 billion investment adds to the 9.9% stake that Constellation bought in October of last year and sets the company up to either be bought outright by Constellation — via warrants that could increase its stake to more than 50% — or continue to work with the beverage company to create a range of consumer-focused cannabis products that may one day appear in markets in dozens of countries.