October Fed Minutes Prevent S&P 1,800 as Wall Street Ends Lower Again

Michael Teague |

Stocks extended their slide to a third day on Wednesday after the release of the minutes from October’s Federal Open Market Committee hearing indicated that the Central Bank had been considering a scenario in which the drawing-down of asset purchases, better-known as “tapering”, could take place even in the absence of significant improvements in the job market.

The reaction on Wall Street at least temporarily mooted the recent anticipation that the Standard & Poor’s 500 index would break 1,800.

The benchmark index closed 0.36 percent lower at 1,781.37 points, while the Dow Jones Industrial Average was off by 0.41 percent to close at 15,900.82 points, and the NASDAQ ended the day at 3,921.27, a loss of 0.26 percent.

The National Association of Realtors released the more significant of the day’s economic data, with a report showing existing home sales in the month of October at their lowest since June. The decline is in large part due to the twin factors of lower inventory and the persistence of a restrictive lending environment for prospective buyers.

Basic materials and industrial goods stocks were the biggest weights on the Dow, with ExxonMobil (XOM) shedding almost one percent. Last week, Warren Buffett announced he was taking a $3.45 billion stake in the company, but on Wednesday, legendary short-seller Jim Chanos gave his take on big oil, telling the financial community that the so-called “super-majors” no longer had the capacity to generate the same cash flow as they once did.

Boeing (BA) took the day’s biggest losses, however, dropping over 3 percent after its stock was downgraded to “hold” by the investment bank Oppenheimer & Co.

On the S&P 500, Equities.com turnaround stock J.C. Penney (JCP) rose over 8 percent on expectations of greater same-store sales for the fourth quarter. The day’s biggest loss was taken by the J.M. Smucker Company (SJM) , down over 6 percent after releasing a disappointing Q3 income statement, and dragging other consumer goods stocks with it.

On the NASDAQ, techs performed erratically, with Zynga Inc. (ZNGA) gaining 7 percent, and Yahoo! (YHOO) up nearly 3, while shares for Groupon (GRPN) were down over 6 percent. Microsoft (MSFT) added nearly 1 percent by the closing bell, as the company continues to decide on a successor to outgoing CEO Steve Ballmer.

In healthcare, Inovio Pharmaceuticals (INO) advanced over 5 percent after the announcement of favorable results in preclinical studies of an upcoming MERS vaccine.

Investors with a hankering for dividends should take a look at our short guide to utilities ETFs.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
INO Inovio Pharmaceuticals Inc. 7.08 0.22 3.21 1,089,259
XOM Exxon Mobil Corporation 87.48 0.44 0.51 11,741,074
ZNGA Zynga Inc. 2.95 0.09 3.15 8,295,535
BA Boeing Company (The) 152.16 -0.09 -0.06 2,855,946
YHOO Yahoo! Inc. 40.20 0.13 0.32 4,408,407
GRPN Groupon Inc. 3.80 0.01 0.26 21,922,952
SJM J.M. Smucker Company (The) New 126.01 0.73 0.58 667,159
JCP J.C. Penney Company Inc. Holding Company 9.86 0.05 0.51 19,028,438
MSFT Microsoft Corporation 60.22 0.97 1.64 23,552,658
DBFMF DBFMF n/a n/a n/a 0

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