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US Indexes Close Higher Wednesday After Fed Rate Cut

The Dow Jones Industrial Average closed at 27,186.69 on Wednesday with a gain of 115.27 points or 0.43%. The S&P 500 closed at 3,046.77 for a gain of 9.88 points or 0.33%. The Nasdaq Composite closed at 8,303.98 for a gain of 27.12 points or 0.33%. The VIX Volatility Index was lower at 12.32 for a loss of 0.88 points or -6.67%.

Wednesday's market movers

U.S. indexes closed higher Wednesday after the Federal Open Market Committee announced a 25 basis point decrease to the federal funds target rate following their two-day October meeting. The Fed also signaled that more rate cuts would need to be fueled by stronger signs of economic weakening, indicating that the new 150 to 175 basis point target could potentially be a floor for the near term.

Companies also continued third-quarter earnings reports with over 300 companies releasing results. Top results for the day included:

  • General Electric (NYSE:GE): Revenue of $23.36 billion decreased 0.1% year over year and beat estimates by $460 million. Third-quarter GAAP earnings loss of 15 cents per share missed estimates by 25 cents and non-GAAP earnings of 15 cents beat estimates by 3 cents.
  • Lyft (NASDAQ:LYFT): Revenue of $955.6 million increased 63.4% year over year and beat estimates by $40.45 million. Third-quarter GAAP earnings loss of $1.57 per share beat estimates by 9 cents and non-GAAP loss of 41 cents per share beat estimates by 32 cents.
  • Facebook (NASDAQ:FB): Revenue of $17.65 billion increased 28.6% year over year and beat estimates by $300 million. Third-quarter GAAP earnings of $2.12 per share beat estimates by 24 cents.
  • AGNC Investment (NASDAQ:AGNC): Net interest income of $119 million decreased 36.7% year over year. Third-quarter GAAP earnings of 59 cents per share beat estimates by 9 cents.
  • Apple (NASDAQ:AAPL): Revenue of $64.04 billion increased 1.8% year over year and beat estimates by $1.18 billion. Fourth-quarter GAAP earnings of $3.03 per share beat estimates by 19 cents.

Economic reports affecting market trading included the following:

  • The MBA Mortgage Applications Index increased 0.6% following a decrease of 11.9%. The MBA's average 30-year mortgage rate increased to 4.05% from 4.02%.
  • The ADP private sector employment report showed payrolls increasing by 125,000 in October following an increase of 93,000, but mostly in line with the estimates of 120,000 to 150,000.
  • The Commerce Department's gross domestic product report showed GDP growth of 1.9% in the third quarter following an increase of 2%, mostly in line with estimates of 1.6% to 1.9%.
  • The EIA's Weekly Petroleum Status report showed crude oil inventory up 5.702 million after a decrease of 1.699 million.
  • The Fed reduced its target federal funds rate from 1.75% to 2% to 1.50% to 1.75%.

In the S&P 500, the utilities, real estate and consumer discretionary sectors led gains. In the S&P 100, the following stocks led gains:

  • General Electric (NYSE:GE) 11.47%
  • Netflix (NASDAQ:NFLX) 3.64%
  • Apple (NASDAQ:AAPL) 3.39%

Small-cap stocks

In small caps, the Russell 2000 closed at 1,572.85 for a loss of 4.23 points or -0.27%. The S&P 600 closed at 975.91 for a loss of 4.45 points or -0.45%. The Dow Jones U.S. Small-Cap Growth Index closed at 9,976.65 for a loss of 22.11 points or -0.22%. The Dow Jones U.S. Small-Cap Value Index closed at 9,681.72 for a loss of 41.90 points or -0.43%.

Other notable indexes

Other notable index closes included the S&P 400 Mid-Cap Index at 1,969.94 for a loss of 5.30 points or -0.27%; the S&P 100 at 1,351.83 for a gain of 5.98 points or 0.44%; the Nasdaq 100 at 8,083.11 for a gain of 35.60 points or 0.44%; the Russell 3000 at 1,784.63 for a gain of 5.01 points or 0.28%; the Russell 1000 at 1,682.79 for a gain of 5.37 points or 0.32%; the Wilshire 5000 at 31,147.16 for a gain of 81.61 points or 0.26%; and the Dow Jones U.S. Select Dividend Index at 734.53 for a loss of 1.55 points or -0.21%.

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This article first appeared on GuruFocus.