U.S. equities reversed course in late-day trading to finish mixed as caution appeared to set in ahead of tomorrow’s monetary policy decision from the Federal Reserve.
Treasury yields were higher and gold gained ground, while the U.S. dollar was lower and crude oil prices were mixed.
The Dow Jones Industrial Average declined 27 points (0.1%) to 25,887
The S&P 500 Index was nearly unchanged at 2,833
The Nasdaq Composite increased 9 points (0.1%) to 7,724
In heavy volume, 968 million shares were traded on the NYSE and 2.4 billion shares changed hands on the Nasdaq
WTI crude oil inched $0.09 lower to $59.29 per barrel and wholesale gasoline added $0.02 to $1.88 per gallon
The Bloomberg gold spot price advanced $2.99 to $1,306.70 per ounce
The Dollar Index—a comparison of the U.S. dollar to six major world currencies—lost 0.2% to 96.37
Factory orders flat, Fed meeting begins
Factory orders grew 0.1% month-over-month in January, versus expectations of a 0.3% rise, and compared to December’s unrevised 0.1% increase. Stripping out the volatile transportation component, orders moved 0.2% lower, above December’s upwardly-revised loss.
Treasuries were lower, as the yields on the 2-year and 10-year notes, along with the 30-year bond, were 1 basis point (bp) higher at 2.47%, 2.61% and 3.02%, respectively.
The Federal Open Market Committee’s (FOMC) monetary policy meeting began today, which will conclude tomorrow with its rate decision. It is widely expected the Committee will leave the target range for the fed funds rate unchanged, while the press conference by Fed Chairman Jerome Powell is likely to be of significant interest to investors.
In addition to the conclusion of the FOMC monetary policy meeting, the only other item on tomorrow’s economic calendar is MBA Mortgage Applications.
Europe higher with caution set aside, Asia mixed
European equities finished higher, as this week’s positive returns in the U.S. and tomorrow’s Fed rate decision seemed to stoke confidence. Meanwhile, economic news in the region was upbeat, as strong unemployment data in the U.K. complemented a rise in a read on economic sentiment out of Germany. The unemployment measures in the U.K. hit a 44-year low, but the reaction was muted as an unchanged monetary policy decision by the Bank of England in May is widely expected, while the Zew Economic Sentiment Survey in Germany rose 9.8 points to a level of -3.6, with the current conditions reading moving lower.
The euro traded to the upside versus the U.S. dollar, while bond yields in the region were higher. The British pound finished higher versus the greenback in choppy action, as Brexit uncertainty over a possible European Union extension and a third vote of the Prime Minister’s plan persisted.
Stocks in Asia finished mixed on the heels of yesterday’s modest gains in the U.S., as caution ahead of tomorrow’s monetary policy decision out of the U.S. coupled with continued U.S./China trade uncertainty to drag on conviction.
Japanese equities declined slightly, with some choppiness in the yen, and Australian securities were flat following the release of the minutes from the Reserve Bank of Australia’s latest monetary policy meeting. The report cultivated somewhat mixed reviews, as it reinforced labor and trade conflict concerns that were behind the decision to leave the board’s inflation target unchanged, noting that trade tensions “remained a continued source of uncertainty for the global outlook.”
Stocks in mainland China declined, but those traded in Hong Kong ticked higher, while markets in India and South Korea gained ground.