Higher oil prices and the Federal Reserve’s monetary policy statement were the key catalysts for U.S. market indexes Wednesday.
The Dow Jones Industrial Average gained 51.23 points to close at 18,041.55 for a gain of 0.28%. The Standard & Poor's 500 also closed higher for the day at 2,095.15 for a gain of 3.45 points or 0.16%. Technology stocks continued to trend lower as Microsoft (MSFT, Financial), Alphabet (GOOGL, Financial), Apple (AAPL, Financial), Facebook (FB, Financial) and Twitter (TWTR, Financial) were key market movers for the day.
The Federal Reserve Board released its monetary policy statement Wednesday afternoon reporting no change in the federal funds rate for April which leaves the rate at 0.25% to 0.50%. In its April statement it cited fewer risks from the global economy, which could be an indication that its next rate increase could be near; however, slowing projected GDP growth is a main concern.
Many investors believe the Federal Reserve will likely increase rates next in June; however, another rate increase may not occur until later in the year.
An unchanged rate increase as expected helped move U.S. market indexes higher, also helping increase oil prices. The primary driver of the day’s oil price gains was the Fed’s indication that global risks could be less of a factor for the economy. The dollar also closed slightly weaker.
In the broader market, the Nasdaq Composite was down 25.14 points to 4,863.14 for a loss of 0.51%. Technology stocks continued to trend lower led primarily by Apple, which reported disappointing sales and earnings results for its second quarter. Apple’s iPhone revenue was down 18% from the comparable quarter, iPad revenue fell 19%, and Mac revenue was 9% lower. The large-cap tech company’s lower sales have weighed on markets and created greater anxiety regarding broader challenges in the sector, specifically for mobile and personal computers.
On Wednesday, Microsoft, Alphabet, Facebook and Twitter also added to the tech sector’s market losses trading off from market highs. Valuations for Microsoft and Alphabet followed Apple lower as earnings decreased.
Facebook and Twitter reported earnings this week. Twitter’s lower revenue and lack of new users led to losses Wednesday. The stock was down 16.19%. Facebook’s earnings results beat both revenue and earnings per share estimates. For the first quarter the firm reported revenue of $5.38 billion for an earnings beat of $120 million and a comparable quarter gain of 52.0%. EPS beat analysts’ average estimate by 15 cents for a total of 77 cents, and the stock reported an increase of 0.12%.
